Why going with your gut isn't usually the best move
Having a lot of choices is great — until it's not.
In fact, according to researchers Simona Botti from the London Business School and Christopher Hsee of the University of Chicago, we spend so much time seeking out options that it outweighs any benefit of having additional choices. Choices come at a cost — and most of us underestimate how much we're paying.
Accordingly, when you're researching options, set a time limit for yourself, and make sure you're not using your decision-making angst as a procrastination device.
Don't assume everyone else has better information.
We tend to assume everyone knows something we don't and therefore we should do what they're doing (because they must be acting on superior knowledge), but that's not necessarily the case.
Behavioral economist Matthew Rabin and Erik Eyster extended this further, explaining that this herding effect can perpetuate wrong choices: as a group, we seem to overestimate how much people are acting on better private information, and underestimate how much they're simply following others.
Sometimes, people genuinely are privy to real information you're not. But in plenty of cases, they're just following the crowd.
Harness the power of a good nap.
While we previously cautioned against going with your gut, a study from the University of Amsterdam found that there's a time and a place for everything, and when it comes to complex choices, sometimes it's best to let your unconscious mind do the heavy lifting.
In cases where a lot of independent factors are at play, making a decision when you're mind isn't actively focused can actually lead to better, more satisfying choices.
To harness the decision-making power of your unconscious, distract your conscious brain by sleeping or working on something else.
Be sure you're not just seeing what you want to see.
When we're presented with uncertain information, we tend to interpret in a way that confirms what we already think or want. This "confirmatory bias" actually makes us overconfident in our choices, despite the fact that we don't have any real reason for our certainty.
If you notice you have a preference for a specific choice, and you notice that choice conveniently happens to be the easier or more familiar one, it's essential to make sure you're not unconsciously reframing information to support something you only wish was true.
Don't assume everyone's as trustworthy as you are.
There's a downside to being a highly trustworthy person: you're not very good at assessing whether someone else is trustworthy, too.
Due to "false consensus" theory, we tend to think other people would behave pretty much as we would in a given situation. That is, if you're honest, you assume everyone around you is honest, and if you tend to lie, you see a world of liars.
And that tendency persists even when we get information to the contrary. If you're extremely trustworthy, then, be careful that you're not extending your (admirable) characteristics to someone who might not deserve it.
Don't let too much information obscure the important stuff.
One of the lessons from Malcolm Gladwell's bestseller "Blink" is that information overload can be overwhelming — and too much information can be worse than no information at all.
It's easy to get so much data that it becomes almost impossible to pick out what's relevant and important. Accordingly, Temple University professor Angelika Dimoka told Newsweek, "people's decisions make less and less sense" — that is, if they're able to make them at all. Total decision paralysis is a possible side effect of too much information, she notes.
The upshot: Focus on the quality of information you're getting, not the quantity.
Give yourself a small reward.
When making a difficult decision — like whether to invest in a near-term but lower-payoff option or a more distant, higher-payoff one — it becomes easier to make the long-term choice if you move a small amount of that payoff up front.
The practical lesson: Never underestimate the power of a treat.
Practice predicting the likelihood of various outcomes (you'll get better at it).
A study cited in the Wall Street Journal found that weather forecasters have among the highest risk intelligence ever recorded.
That's likely because forecasters, unlike the rest of us, are constantly required to assign probabilities and percentages to possible outcomes, and they get frequent, fast feedback on their predictions. As a result, they're better at being realistic with their calls.
That suggests that even the non-meteorologists among us can get better at making accurate "forecasts" with practice, keeping track of our stats and learning from our previous mistakes.
Have a snack.
You can't think clearly when you're hungry — and a Diet Coke's not going to do the trick.
"Even the wisest people won't make good choices when they're not rested and their glucose is low," social psychologist Roy Baumeister told the New York Times. "That's why the truly wise don't restructure the company at 4 p.m. They don't make major commitments during the cocktail hour. And if a decision must be made late in the day, they know not to do it on an empty stomach."
When your glucose is low, your brain responds more strongly to immediate rewards, and is less likely to prioritize long-term prospects. In conclusion, have a snack first.
Don't let your fear of 'losing' get in the way of doing the right thing.
According to researchers at Wharton, the world's top golfers lose an average of $1.2 million dollars a year in winnings because of a cognitive bias called loss aversion.
Logically, golfers should be most cautious and putt at their best when they're under par. But they're not — and in fact, they're significantly less careful when they're "winning" than they are when they're "losing." That's loss aversion in action: they start making more focused moves only once the stakes have climbed dangerously high.
Don't be a golfer. Refuse to let reference points like 'winning' or 'losing' interfere with making the right decision.
Remember: 'hot streaks' aren't real.
Thanks to the "hot hand" fallacy, we tend overestimate the power of a hot streak. If you're winning, then why wouldn't you just keep winning?
The problem is, the world doesn't work that way, and just because something has been happening doesn't mean it will continue to happen. (But it also doesn't necessarily mean it won't.)
According to behavioral economists Matthew Rabin and Dimitri Vayanos, most of us tend to underestimate the meaning of short streaks, but overestimate the importance of longer ones.
Tread carefully — especially when things are going well.
Meditate to help you resist 'sunk cost' bias.
Once we've invested time and money in something, our tendency is to keep investing more time and more money in that thing — even once it's become abundantly clear that our investment isn't paying off.
But researchers from Wharton have discovered one way to help overcome the "sunk-cost bias": meditation, which has been shown to help people let go of the past and focus on the present.
And you don't necessarily need a disciplined meditation practice to reap the benefits (though it probably helps) — even a few minutes of meditation before a big decision can have a major effect.
Beware of stereotypes.
Even when we're aware of stereotypes, we sometimes still fall victim to them.
And while negative stereotypes are bad for obvious reasons, research from Duke indicates that positive stereotypes can be at least as destructive — if not more so, since they're particularly unlikely to arouse skepticism (and especially likely to produce antiquated beliefs).
Question your assumptions — the negative ones and the positive ones. Are you making choices based on facts or stereotypes? That's harder to parse than it might initially seem, but as is so often the case, awareness is the first step.
Don't mistake the most recent information for the best information.
We tend to give more weight to whatever information we got most recently — whether or not it's particularly interesting or important.
"There is a powerful 'recency' effect in decision making," behavioral economist George Loewenstein tells Newsweek. "We pay a lot of attention to the most recent information, discounting what came earlier."
Part of the problem is that brains just aren't very good at giving only a little bit of weight to a piece of information, explains psychologist Eric Stone. When we learn something, we want to go all in.
Make sure you're going off the best information you've got, not just the latest.
Try adopting an outside perspective.
Research from Tal Eyal of Ben Gurion University and Nicholas Epley of the University of Chicago found that most of us are incredibly bad at anticipating the way other people see us.
While we evaluate ourselves in tremendous detail, we have a more impressionistic view of others. And while we view ourselves in the long term, we tend to see other people only in the moment. (This is the reason that you're still humiliated about that time you tripped three years ago, and no one else cares).
By switching those up and adopting someone else's perspective, you can get a better idea of how they may react to a given decision — and make your choice accordingly.
Close your eyes to help make more ethical decisions.
When faced with a difficult decision, people often close their eyes for a moment to focus. That's not just a theatrical flourish, it turns out — closing your eyes may have a real, positive effect on decision making.
Research from Eugene Caruso of the University of Chicago and Francesca Gino of Harvard found that closing one's eyes during decision making led to "increased mental simulation and more intense emotional reactions to the action under consideration."
As a result, eyes-closed deciders tend to respond more positively to ethical choices, more negatively to unethical ones, and to take less self-interested actions.
Consider your options in a foreign language.
Facing a choice with a high emotional charge? Try evaluating your options in a foreign language.
Researchers at the University of Chicago found that people were more analytical and less emotional when they made decisions in a language other than their own.
At first blush, that seems counterintuitive — shouldn't the stress of processing a non-native language actually compound the stress of making a decision in the first place? But the researchers suggest that the opposite is true: the foreign language "provides greater cognitive and emotional distance than a native tongue does," they explain.
Remember that how you feel now isn't how you'll feel forever.
When we're making choices about the future, there's a tendency to assume that however you're feeling now is the way you'll feel feel forever.
It's called the "hot-cold empathy gap" — when you're in a "cold" state, it's easy to make firm, well-reasoned choices about how you'll act in the future, from the trivial (no, you won't eat that potato chip) to the deadly serious (the decision not to endure grueling chemotherapy to your extend life by a few months).
The problem is that when you're in a cold state, it's nearly impossible to anticipate how you'll feel when you're in a hot one — and that can render even the best-laid plans moot when that hot state inevitably arrives.
Listen to your body.
The body has a physical reaction to panic or stress. Adrenaline pumps, you start breathing more rapidly, and certain parts of the body feel tight.
In those instances — particularly when you're feeling angry or afraid — you tend to make snap judgments that may be incorrect, writes Tony Schwartz in the Harvard Business Review. But there's a simple fix: when you notice your body having that kind of response, close your eyes, take a few breaths, and take some time to consider your next action.
Your goal here is to buy time until you're physically calm enough to make a more considered choice.
Don't blindly trust the numbers.
Big data has been revolutionary for a number of industries. New sources and analytics tell us more than ever about customer preferences and activities.
And yet data can be dangerous — and blindly accepting the numbers can be as bad as ignoring them altogether. The best attitude is what Shvetank Shah calls "informed skepticism." Know what the data means, but trust your judgement.
Don't forget that the best choice could be no choice at all.
Sometimes you have to make a choice. Other times, though, you don't have to choose — and it's possible that no choice may be the wisest choice of all.
Canadian researchers found that managers were more likely to make high-risk decisions when they were forced into choosing between two complex options. But when they were given the option not to decide, they tended to "reflect more and solve problems with fewer negative consequences."
When you're stuck between two options and neither seems right, it's worth asking yourself if you really have to make a choice right now.
Make your most important decision first to beat 'decision fatigue.'
Brains get tired, and the more choices we have to make in a row, the worse we get at making them.
That's why back-to-back meetings are so draining: because "no matter how rational and high-minded you try to be, you can't make decision after decision without paying a biological price," explains the New York Times' John Tierney.
When you're suffering from decision fatigue, your mind starts to find shortcuts, and one of two things happens: either you get impulsive (buy the candy!), or you start to avoid making any choices at all. Accordingly, the aim to make your important decisions relatively early in the day, before your decision-making powers start to falter.
Conduct a "premortum" to better assess the possible outcomes.
One way to make better business decisions: imagine it's a year later, and work backwards.
It's called a "pre-mortem," and it's one of Nobel winner Daniel Kahneman's favorite techniques for doing the right thing, according to Bob Sutton's book, "Scaling Up Excellence: Getting to More Without Settling for Less."
To do it, divide your team into two groups: one that imagines the effort you're considering was a fantastic success, and the other that imagines it was an unequivocal disaster. Then, have both groups analyze why the success or failure occurred. By harnessing the power of "predictive insight," you'll be able to better overcome blind spots, dampen excessive optimism, and bridge the gap between short-term and long-term thinking.
Allow yourself not to be so specific.
It's tempting to assume that crisp, clear decisions are the best kind of decisions.
But that need for precision can actually lead to wasted time and unnecessary decisions. Often, the details don't actually matter — and while it's counterintuitive, allowing for some fuzziness can help shift your focus toward more meaningful conversations.