Let’s be honest. Making tough decisions sucks. The pressure builds. The consequences mount. And as time goes on the stakes begin to rise. Whether we like it or not, when it comes to business (and life in general) our responsibilities tend to increase as time goes on. This type of entropy becomes a tangible part of our life as we get older. No matter who you are, you will be faced with difficult decisions to make at some point in your life. Those who disagree are simply not making them, although it’s important to remember that not making a decision is still a decision. The fear of making mistakes weighs on all of us, yet wouldn’t you much rather make a mistake than do nothing at all? When we make a mistake at least we have the opportunity to correct it; you never have that option when you fail to act altogether.
So does the questions become how do we make better decisions? Or is it how to not make as many bad decisions? It’s important to remember that as we travel through life we gain experiences that help shape our decision making abilities. But decisions come at a cost, especially in terms of energy. Our brain requires a significant amount of fuel each day - most research suggests our grey matter is responsible for consuming twenty percent of our total daily energy needs. Despite all this, the brain is always looking for ways to take shortcuts by identifying patterns, and these patterns are what it likes to automate in order to preserve its precious energy. These automations (i.e. shortcuts) are what we call habits, and habits are what form the basis of our daily routines.
In addition, we often let past experiences guide us when we’re stuck making a big decision. It can be helpful to use the past as a guide, but be aware of how it can trick you. When used the wrong way it can fuel our mental addiction of regarding past decisions or evaluations as absolute truth. Our brains enjoy this addiction, or habit, because it’s an effective way to speed up the decision making process. During this process we ignore the opportunity to look objectively at the situation to decide if the past is really any indication of the present issue at hand, or if we need to attack it from an entirely different angle. This type of action requires you to develop the ability to be fully present without the preoccupation of cognitive biases from your past getting in the way.
Take a moment to think of your past and consider how it has framed the way you make decisions today. We tend to make bad decisions because of an unrelated past result that might have been successful, and we refuse to let go of that memory. More obvious examples of this are found in gambling, or how we invoke superstitions in our actions because it worked this way before, it’s safe to say I should do it this way again. This doesn’t mean we should not use the past as our guide; it simply means we should be aware of its potential to invoke cognitive bias in us.
I talk a lot about the The Lake Wobegon effect, which is our natural human tendency to overestimate our capabilities. I love this topic because it’s abundant everywhere you look. If the majority of people consider themselves above average, where have all the average people gone? In my opinion, cognitive biases like this one can be a positive thing when it comes to entrepreneurism. If we didn’t feel above average, we might take less risks. Entrepreneurs tend to suffer from this effect, and it’s what fuels their relentless pursuit to create.
The IKEA effect is an example of a cognitive bias that can mess with our value systems. It’s defined as the tendency for people to place an unusually high value on things that they assemble themselves, regardless of the quality of the finished product. We all know IKEA furniture is disposable, yet we attach a strong sense of pride and value in it once it’s built. Who would go through such effort to assemble that GNEDBY bookshelf if it wasn’t really worth it? It might cost you your marriage, but you’ll be damned if you leave that thing unfinished.
Cognitive biases are all around us. They build complex layers of emotion in our heads and this ends up clouding our judgment. The key to avoiding the cognitive bias trap lies in your ability to ask yourself questions. Relevant, thought-provoking questions, such as, “Am I looking clearly at the issue at hand? Am I being pulled one way or the other because of something similar in the past? Do I need more data in order to make this decision? Is there someone I need to talk to about this before I decide? What are the steps to take? What do I want? What do I feel I need? What do I hope to accomplish from this decision? How will this benefit me?”
“The minute we begin to think we have all the answers, we forget the questions” - Madeline L’Engle
Asking important questions creates an effective internal dialogue for you to dig deeper into the problem(s) you are attempting to solve. It allows you to cut through emotional ties you may have to past decisions. Even though tough decisions are exactly that, tough, don’t forget the impact they can have for years to come. Remember, not making a decision is also a decision you have to make, so sometimes it makes sense to stand back and not act. But when you are mindful of how cognitive bias can affect your ability to make decisions, you’ll begin to make more of the right ones.
And you might even stop buying furniture from IKEA.