Strategy, Business Decisions and Saber-toothed Tigers
In business, all to often, decisions are made based on emotion and not on critical evaluation. Call it “being decisive” or call it having a talent for being able to act fast; because you have trust your instincts. Regardless, it can be reckless and costly in business. So how should we make strategically sound decisions?
Psychologists believe the human mind has two systems for decision-making: intuitive and reasoning. The intuitive system, sometimes referred to as the “Reptilian Brain” is responsible for neurological response that evolved to help humans make good decisions in a limited amount of time (say, before getting eaten by a saber-toothed tiger). Such decisions are based on survival and are intuitive in nature. The intuitive system is emotional, fast, automatic but slow-learning, while the reasoning system is emotionally-neutral, slow, controlled, and rule-governed. Neither, of course, is always right, but there are definitely limits to what intuition can offer. Experts agree that it is important to distinguish between decisions that should be made by intuition and those that require careful calculation.
Given the reasoning system’s rule-controlled, emotionally-neutral orientation, wouldn’t it be useful to us if we could rely on a decision-making approach that offered objectivity in evaluating and classifying wants versus needs relative to our organization’s strategy? Strategic decisions in our business bring with them long-term consequences, so carefully analyzing our available options is all the more crucial to running a successful business. Having such a system gives us a little edge over our own impulsive human nature.
The Need To Prioritize
Business leaders are constantly faced with opportunities they would like to pursue and situations where they must choose between them with care. There are hundreds and thousands of attractive new ideas and opportunities that glitter and sparkle with appeal, lying in wait to tempt us. The opportunities may come in the form of a potential acquisition, an investment in a new product or service line or perhaps simply the contemplation of expanding our office space to accommodate the growth we sense is coming soon. Opportunities that come our way and new ideas that can shape our business can be a blessing of course, but not all of them are actually good for us in terms of pursuing our business strategy.
Sometimes our “wants” are founded on legitimate needs and should not be ignored. Other times we desire things that are self-serving, motivated by pride or by impulse. These are “desirements” disguised as opportunities and we would be better off filtering out, or at least more carefully scrutinizing them. How often have we rationalized making a decision to classify a “want” as a “need”, only to realize that later that we regret the choice and made a mistake? Once we hone the skills to better discern between the two, we find that “wants” exist all around us and “needs” are fewer in number. This outcome relieves pressure on the business.
Prioritization is a fundamental component of the cognitive decision-making process. It is essential to develop this ability draw upon this skill in our strategic planning, having it at our disposal for making routine business decisions as well. It will help eliminate extraneous factors in our decision process and make choices that are right for our business – acting on opportunities that are strategically aligned with our long-term plans. It boils down to applying our reasoning system’s rule-controlled, emotionally-neutral orientation and separate requirements from “desirements” and make controlled and informed decisions that support our long-term strategy.
Come back again next week for a new article, and until then…make good decisions!