That way people who make good decisions 60% of the time might be able to increase that percentage to 80%, and wouldn’t life be better if they did? Some people just seem to make better choices than others, so what’s the reason?
The reason is they have learned to. General knowledge and experience of the world is a major factor, but there are a number of ways serial bad decision-makers can up their game. Here are eight ways you could improve your decision-making:
Impulsive decisions, particularly under pressure, have a tendency to go horribly wrong. The main reason for this is that people who make impulsive decisions deny themselves the opportunity to make a choice based on carefully considered criteria.
People with a gift to make quick choices are often praised, but not when they end in trouble. Much better, then, to delay, consider and act rather than hastily skip the first two steps and jump headlong into the third.
There is strong statistical evidence showing that hungry people think more clearly than those on a full stomach. Using the Iowa Gambling Task (IGT), a study by scientists at Utrecht University in The Netherlands revealed that people who hadn’t eaten recently made better decisions and had a clearer perception of relative rewards.
The IGT is a computer simulation using four decks of playing cards to simulate decision-making in real-life. Different cards have different values; some win money, some lose, some have a reward attached and some a penalty. The idea is to figure out which decks will win money in the long run and which will lose.
The test contradicted conventional wisdom that people are less rational when hungry than they are when full up.
Another Netherlands study, this time at the University of Twente, concluded that bladder control is linked to parts of the brain that dictate emotions of desire and self-reward. In other words, when the brain seeks to control one part of the body it can’t help but control other areas too.
This promotes better decision-making because people can postpone making important choices and give themselves more time to weigh up the options; ultimately giving them a better chance of a positive outcome.
There is a big difference between an impulse decision and one made on through gut instinct. The latter type is a totally legitimate source of direction if it is based on knowledge of prior events, familiar people or known outcomes.
It’s important, however, not to confuse gut instincts with complete flip-of-coin chance. Over-confident people should beware. There must always be factors at play that make a desirable outcome more likely than not.
People with high levels of emotional intelligence tend to get things right more often than those who can’t control their mood, according to a study Rotman School of Management at the University of Toronto, Canada.
The key is to recognise emotions and understand where they have come from, so that you can compartmentalise and move on. Without doing this, people risk letting emotions impact on unrelated tasks.
The best poker players, for example, are those who can separate the game in front of them from events in the past and in the future. It also helps them wave goodbye to lost money and concentrate on the next hand.
Valentina D'Orefice, marketing manager at PokerStars.com sums it up: "It’s a bad idea to bring your frustrations into a game of poker, especially if the stakes are high. The best players park their emotions at the door and play in a calm and methodical way.”
Stéphane Côté, a research at Toronto University, agrees: "People are driving and it's frustrating. They get to work and the emotions they felt in their car influences what they do in their offices. Or they invest money based on emotions that stem from things unrelated to their investments."
One major criticism of poor decision-makers is that they wait until the last minute to make their choice, giving themselves little time to prepare (see point 1). In business, the best CEOs are those who can project forward and anticipate a range of possibilities about the future.
They don’t necessarily make those decisions ahead of time, but they have a clear idea of likely scenarios, giving them a chance to weigh up options before the real scenario arrives. Giving yourself time to make a decision is critical to getting it right.
The opposite of deciding too quickly is over-thinking a problem – which can be just as bad. Any problems come with a list of ‘known unknowns’, in other words a bunch of stuff that you won’t be able to predict. People waiting for 100% a guarantee will wait forever.
It’s important to gather your data, consider past scenarios, take into account future expectations and settle on a course. If one particular route has a 51% chance of success and the other 49%, you go with the first; go with neither and you have a 100% chance of failure.
Some of the best poker players consider the likely odds of winning any given hand in mathematical terms. They consider the odds that they have the best cards and work out what to do next based on other factors, such as other players’ ‘tells’.
The academic and psychologist Daniel Gilbert says most people aren’t gifted at making rational decisions, nor are we good at predicting what will make us happy in the long-run. His advice to those not born with a knack for decision-making is quite simply to ask someone else.
“The differences between you and other people are so unimportant that you would do better predicting how you are going to like something simply by asking one randomly chosen person how they like it,” he says.
Have you come across a great strategy to improve decision-making or do you want to share tips and tricks? Let us know in the comments box below.