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How Can We Make Better Decisions?

Brain science helps redefine decision-making

Do our leaders-or for that matter do any of us-trust our brains and rational thinking when making important decisions? Or do we make better decisions based on gut instinct and emotions? Recent research on the process of decision-making has brought to light surprising conclusions that contradict conventional wisdom.

Research by Daniel Kahneman, a psychologist and Nobel Prize winner in economics, and Gary Klein, a senior scientist at MacroCognition, discussed the power of intuition to support decision-making in high pressure situations. When asked, "when should you trust your gut?" Klein responded, "never,' arguing that leaders need to consciously and deliberately evaluate their gut feelings. Kahneman argues that when leaders are under time pressure to make a decision, they need to follow their intuition, but adding that overconfidence in intuition can be a powerful source of illusions. Klein argues that intuition is more reliable in structured stable conditions but may be unreliable in turbulent conditions, using the example of a broker choosing stocks. Kahneman cautions leaders to be wary of "experts' intuition," unless those experts have dealt with many similar situations in the past, citing the example of surgeons.

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In the publication, Science,  researchers Ap Kigksterhuis, Maarten Bos, Loran Nordgen and Rick van Baaren, argue that effective, conscious decision-making requires cognitive resources, and because increasingly complex decisions place increasing strain on these sources, the quality of our decisions declines as the complexity of decisions increases. In short, complex decisions overrun our cognitive powers.

On the other hand, the researchers argue, unconscious decision-making-or intuition or gut instinct-requires no cognitive resources, so task complexity doesn't degrade its effectiveness. This seemingly counter-intuitive conclusion is that although simple decisions are enhanced by conscious thought, the opposite holds true for complex thinking.Two pertinent questions are: What accounts for a complex decision and what accounts for a good outcome to that decision? Psychologist Tom Tyler's studies of the criminal justice system show that people value less the legal system's outcomes, as much as the opportunity to see justice done. So the outcome is a matter of perspective.

While Kaheman, Klein, and Dijksterhuis and his colleagues disagree on the best way to make complex or strategic decisions, they bring to light for leaders the importance of both rational, logical thinking and unconscious intuitive or gut thinking.

New research by psychologists at the University of Warwick suggests gender plays a role in decision-making. They argue that because men and women perceive the world differently, they make decisions differently. The researchers say that because men organize their world into "black of white" distinct categories, women see things as more conditional and in shades of gray. Traditionally, cultures have rewarded males for being decisive and proactive, whereas females are socialized to be more thoughtful and receptive to others' views.

Research conducted by neuroscientists Daeyeol Lee of Yale University, Daniel Salzman of Columbia University and Xiao-Jing Wang of Yale University has reached the following conclusions regarding decision-making:

  • Our emotions affect all our decisions
  • Most decisions involved some kind of reward we receive 
  • Poor decision-making can be a result of dysfunctional brain activity or the impact of negative emotional states such as extreme anxiety.

Contrary to what most of us would like to believe, decision-making may be a process handled to a large extent by unconscious mental activity. A team of scientists has unraveled how the brain actually unconsciously prepares our decisions. Even several seconds before we consciously make a decision its outcome can be predicted from unconscious activity in the brain.

This is shown in a study by scientists from the Max Planck Institute for Human Cognitive and Brain Sciences in Leipzig, in collaboration with the Charité University Hospital and the Bernstein Center for Computational Neuroscience in Berlin. The researchers from the group of Professor John-Dylan Haynes used a brain scanner to investigate what happens in the human brain just before a decision is made. "Many processes in the brain occur automatically and without involvement of our consciousness. This prevents our mind from being overloaded by simple routine tasks. But when it comes to decisions we tend to assume they are made by our conscious mind. This is questioned by our current findings."

Alex Pouget, associate professor of brain and cognitive sciences at the University of Rochester, has shown that people do indeed make optimal decisions-but only when their unconscious brain makes the choice. "A lot of the early work in this field was on conscious decision making, but most of the decisions you make aren't based on conscious reasoning," says Pouget. "You don't consciously decide to stop at a red light or steer around an obstacle in the road. Once we started looking at the decisions our brains make without our knowledge, we found that they almost always reach the right decision, given the information they had to work with."

A study by Joseph Mikels, Sam Maglio, Andrew Reed and Lee Kaplowitz published in the journal, Emotion, supports the power of gut instincts for quick decisions. They gave subjects a series of complex decisions of various types, with the instruction of whether to go with gut instinct or reason it out with information. Overall, they found that compared with trying to work out the details, using their emotions led to much better outcomes.

Neuroscientist Jonah Lehrer, author of How We Decide, points out that people who  experience damage to the emotional centers of their brain are unable to make decisions. Lehrer argues that there is a sweet spot between logic and emotion that makes for good decisions.

Roy F. Baumeister, a social psychologist at Florida State University and author of the book, Willpower: Rediscovering the Greatest Human Strength, argues that willpower plays a part in all our decisions and that willpower fluctuates. Ask people to name their greatest strengths and they'll often cite things as honesty, kindness, humor, courage or other virtues. Surprisingly, self-control or willpower came dead last among virtues being studied by research with over 1 million people.

The most successful people, Baumeister contends, don't have super-strong willpower when making decisions. Rather, they conserve their willpower by developing habits and routines, so they reduce the amount of stress in their lives. He says these people use their self-control or willpower not to get through crises, but avoid them. They make important decisions early before fatigue sets in. Steven Pinker, and a world-renowned cognitive scientist at Harvard, contends, in an article in The New York Times, reviewing Baumeister's work, "Together with intelligence, self-control turns out to be the best predictor of a successful and satisfying life."

Angelika Dimoka, Director of The Center for Neural Decision-Making at Temple University, conducted studies to see what happens when people's decision-making abilities are overtaxed. She found rational and logical prefrontal cortex functioning declined when it become overloaded with information and as a result, subjects in her experiments began to make stupid mistakes and bad choices. "With too much information," says Dimoka, "people's decisions make less and less sense."

So much for the idea of making well-0informed decisions, We are steeped in the belief of due diligence and today's flood of information in the Internet and social media sites can surely overload our cognitive functions. Sheena Iyengar of Columbia University and author of The Art of Choosing, studied the impact of more information for people making investment decisions. She argues that although we say we prefer more information, in fact, more can be "debilitating."

"There is a powerful recency effect in decision-making," says behavioral economist Geroge Loewenstein of Carnegie Mellon University, "we pay a lot of attention to the most recent information, discounting what came earlier. We are often fooled by immediacy and quantity and think it's quality."

So how should we make good decisions, whether we are CEOs or not?

Science writer Sharon Begley, writing in Newsweek, says that experts advise, "dealing with emails and texts in batches, rather than in real time; that should let your unconscious decision making system kick in. Avoid the trap of thinking that a decision requiring you to assess a lot of complex information is best made methodically and consciously. You will do better, and regret less, if you let your unconscious turn it over by removing yourself from the info flux." In other words, learn to switch off the information flow. Second, learn how to use your emotions productively in making your decisions. In a sense, your brain won't allow you to do otherwise.

Ray Williams is the author of Breaking Bad Habits and The Leadership Edge.

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