Motivation and Decision Making

Motivation and emotion are closely linked when it comes to decision making. Often it is the desire to achieve or avoid a certain emotional state that drives a choice. Risk aversion is one example; people tend to prefer choices that decrease the probability that something negative will happen.

Motivational bias occurs when judgment is influenced by the desirability or undesirability of consequences or outcomes. This type of “motivated reasoning” causes people to interpret data and information in the most favorable light for outcomes they desire and in the least favorable for ones they wish to avoid. For example, a banker rewarded based on the number of loans that are approved may provide an overoptimistic assessment of an applicant’s ability to repay the loan. The influence of the motivator may be conscious, as when the banker deliberately interprets the data optimistically, or unconscious as part of the general approach to how the banker does her job.

Motivation drives goal-setting and the … Read the rest

Emotions and Decision Making

We make decisions to achieve some emotional state – to become happy or satisfied, to avoid disappointment or regret. It is the anticipation of some future state of feeling that influences the choice. These are known as expected emotions, the ones we hope to experience. The emotions we actually experience while considering a decision also affect our judgment. These are known as immediate emotions.  At the simplest level, our emotions affect the decision making process when we ask “How do I feel about this?” and then base a choice on those feelings. Some decisions are more likely than others to elicit an emotion. For example, deciding your current mood may strongly influence where you decide to eat dinner but it is less likely to affect the brand of toothpaste you purchase.

The research literature identifies six universal emotions: happiness, surprise, fear, sadness, anger, and disgust. Each of these, and the moods they can create, has the potential to affect the … Read the rest

Cognitive Bias in Decision Making

Since leaders and managers should aim to make decisions on a rational basis following a deliberate, analytical process, reducing bias in the decision making process is essential. This means taking an approach to decision making that recognizes biases exist and that takes steps to counteract them. Simply telling yourself to “slow down and make better decisions” may not always be sufficient. This reading reviews several tactics and practices to keep in mind as ways to structure and manage the decision making process to minimize the influence of bias.

Carving out time for reflection can counteract bias. Even spending a short time thinking about the task ahead and potential biases can significantly improve decisions. Reflection encourages deliberation and builds in time to be more critical of data and conclusions and to promote more thorough analysis.

One simple way to overcome bias is to switch from evaluating options one at a time to evaluating them simultaneously. For example, rather than considering an … Read the rest

Rational Decision Making

The rational model of decision making makes three assumptions about decision makers: that they are rational, evaluative, and maximizing. Rational means they have the ability to apply reason and exercise judgment. They are evaluative in the sense that they place a value on everything and have preferences. Finally, they seek to maximize their choice to derive the highest value at the lowest cost for the things they care most about. Models simplify, however, and we know that decision making in practice can look quite different. That rationality may be bounded by the availability of high quality information; evaluation may include both quantitative and qualitative factors as well as objective and subjective ones; and sometime we choose alternatives that satisfy rather than maximize because we are happy with “good enough” rather than needing to have “the best.”

Decision making follows a process that is generally linear in that it progresses through a series of steps. This is true whether one takes … Read the rest

Introduction to Decision Making

Bringing back Steve Jobs to be CEO of Apple in 1997 is regarded as one of the greatest business decisions of all time. He had been forced out of the company he founded by its board of directors in 1985 after a power struggle with its CEO. Experiencing losses and stagnating market share, Apple looked to Jobs to turn the company around. His commitment to innovation in technology and design led to breakthrough products including the iPod and iPhone, which helped make Apple one of the most valuable companies on Earth.

Conversely, one of the worst business decisions ever was the merger between AOL and Time Warner in 2001. The combination of a then-leading Internet company with a global media enterprise was predicted to create synergies around content and advertising as well as significant cost savings and thus to create great returns for shareholders. The opposite happened as the combination failed to achieve any of the anticipated benefits. Time Warner … Read the rest

Can’t We All Just Get Along? Some Tips for Building Consensus

Consensus is a collaborative, participatory style of decision-making that offers an alternative to top-down or majority rule approaches. Its results often lead to more effective implementation, stronger group relationships, and greater interpersonal connections.

Consensus is both a process and an outcome. It means that the leader and team members listen to each other and try to formulate a proposal that combines many people’s ideas and is agreeable to all.  Consensus means that members are sufficiently in favor of a decision that no one will become an obstacle to carrying it out. It does not mean that everyone gets his or her choice or that there is  unanimous agreement about a best solution. Consensus exists once there is a solution everyone can accept even if they favored another outcome.

A leader should seek consensus when the team needs to agree on a specific decision or plan of action so that it can move forward. If there is ambiguity about the proper … Read the rest

Four key success factors for leading teams

Effective teams are ones that meet their objectives while maintaining their ability to sustain performance and providing satisfactory experiences for the team members. That definition, and  many of the ideas in this post, come from the work of my teacher, the late social psychologist Richard Hackman (see especially this, this, and this).

Leading teams requires attention not only to how the team does its work but also facilitating the collaboration process. So, what are the key success factors for leading a team? The four most important things leaders can do help their teams be effective are:

  1. Set a compelling direction
  2. Establish clear roles and responsibilities
  3. Facilitate interpersonal relationships
  4. Coach the group to enhance its performance

The first two are best done when a team is formed or when it has begun work toward a new goal. They can be revisited and adjusted as the needs of the organization and the team require. The second two are on-going … Read the rest

Six steps to a personal development plan

A key leadership competency is self-awareness, the ability to understand what makes you tick as well as your strengths and weaknesses. An important adjunct to this is taking responsibility for one’s own learning experiences to help develop the skills to lead others and excel at work. That’s why everyone should have a personal development plan in addition to the more typical performance plans, which are focused on work-related outcomes rather than learning.

Professional development does not consist simply of attending discrete events such as workshops and seminars. Rather, it also should be a set of on-going activities including the following:

  • reading articles and books related to learning goals
  • networking with peers in other organizations
  • seeking performance feedback from superiors, peers, and mentors

Follow these six steps to develop a plan that you can follow to enhance your knowledge in your field:

  1. Learning goal: Identify a learning goal for each competency or skill that you want to build. These are the
Read the rest