In
this video, Prof. Baba Shiv of Stanford University talks about the importance
of emotion in decision making. After watching this video, reflect on two situations;
one, in which you were extremely confident of the outcome and what your
attitude was towards the subject; and second, a situation in which you would
less confident or not so confident and how you felt about the situation. Based
on this module's readings and this video write a reflection blog detailing the
situations above and describing the role emotion plays in decision making. Identify
three emotional reactions for each scenario.
Emotion
plays a crucial role in the decision-making process in order to resolve
decision conflicts and emerge from decisions feeling confident, i.e., emotions
yield decisions with conviction. What is the importance of decision confidence?
From the firm's standpoint, low confidence will require high maintenance. From
a personal individual standpoint, high confidence yields three things: 1. Passion
is persuasive 2. Confidence IS contagious 3. And, most importantly, a decision
impacting an experience which in turn leaves a lasting utility to extract from
the experience motivated, engaged, empowered along with passion and energy.
Confidence and overconfidence are greatly underrated (Professor Baba Shiv, 2011).
However, literature and research experts
treat confidence, overconfidence etc as biases and traps. For example,
according to Beshears and Gino (May 2015) there are common cognitive biases and
traps that psychologists and economists have identified that impact impair decision-making
including our ability to objectively evaluate information, form sound judgments
and make effective decisions. From a critical thinking perspective, some of the
dangerous common biases and traps include: action-oriented biases (e.g., excessive
optimism and overconfidence), biases related to perceiving and judging
alternatives (e.g., anchoring, groupthink, and egocentrism), biases related to framing
of alternatives (e.g., sunk-cost fallacy and controllability) and stability
biases (e.g., status quo and present) (Beshears and Gino,
May 2015).
According to Beshears and Gino (May
2015), the foundation in how to use choice architecture to improve decisions is
understanding that human beings have two modes of processing information and
making decisions: System 1 is automatic, instinctive and emotional. System 2 is
slow, logical and deliberate. The emotions for System 1 can be tapped for
productive purposes. Research indicates that collaboration between the firm and
client will strengthen the bond between the two (Beshears
and Gino, May 2015).
For example, a firm and client has
the business goal and result of the client to be confident with the decision
he/she is making or else this could become high maintenance, i.e., spending 90%
of time with client who is still griping, checking with other consultants etc. A
key enabler is required to create this situation. Body language including voice
along with words will reveal lack of confidence. For example, a leader
commander in the military is tasked to carry out a mission and need to give an
order to troops. Imagine if his/her body language and voice did not project
confidence about the course of action. Say World War II examples, General
Eisenhower and D-Day (France), General Patton leading The Battle of The Bulge
(Germany) on the way to Berlin and Admiral Nimitz leading The Battle of Midway Island
(Pacific). And take Prime Minister Winston Churchill in The Battle of Britain
when England was the lone survivor against Germany? What would be the result if
they had not demonstrated courage, confidence along with leadership? If they
did not display confidence about the course of action, the result would be
suboptimal performance and output! The same is true for the business world.
Decision confidence and wanting
yields increased confidence including wanting, engagement and effort. Sometimes
we have to burn the midnight oil, overcome obstacles and fruition of dreams. However,
confidence does matter! Confidence and overconfidence does matter! Passion is
needed, confidence and extraction of utility: motivation, engagement, empowerment
along with passion and energy (Professor Baba Shiv, 2011).
References:
Beshears, John and Gino, Francesca (May 2015).
Leaders as Decision Architects. Harvard Business Review. Volume 93,
Number 5, 52-62. Boston, MA: Harvard Business School Publishing.
Professor
Baba Shiv (2011). Brain Research at Stanford: Decision Making. YouTube. Retrieved
https://www.youtube.com/watch?v=WRKfl4owWKc
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