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How to make better decisions as a leader in times of crisis

It’s no surprise that crisis situations don’t support good decision-making processes. We need look no further than the panic buying of toilet paper, paper towels and bottled water in response to the spread of COVID-19 to see this in action. When the world is unstable, we want to exert control and the result is snap decisions.

Art Markman, PhD and author of Bring Your Brain to Work: Using Cognitive Science to Get a Job, Do it Well, and Advance Your Career, unpacks four reasons why Covid-19 is resulting directly in short-sighted decisions:

  • We’re wired to pay attention to threats. COVID-19 isn’t a distant potential threat. It’s a real disease that people are dying from and it’s spreading rapidly. Every day there are updates to inform – and scare – us. With so little control over the news, we want to exert some control over our immediate lives.
  • We don’t know enough about the spread of the virus. This is not a linear trend, it’s exponential, and we’re not prepared for the impact it will have on work or life.
  • What’s happening is beyond our control. Yes, we can adhere to lockdown rules and social distancing, but that’s about it. When we don’t have control our anxiety levels spike, as well as our deep desire to re-establish some control over our lives and businesses.
  • We don’t know what will and what won’t work. At this point, everything is an experiment.

The business dangers of snap decisions

Let’s step back to a pre-COVID-19 world. A Harvard Business Review study of 343 businesses found that companies that made fast decisions without pausing to ensure they were on the right track underperformed compared to their far more deliberate competitors. Businesses that were slow and thoughtful in their decisions averaged 40% higher sales and 52% higher operating profits – and that was without the extreme anxiety of a global pandemic impacting decision-making capabilities.

How to use deliberative reasoning in a time of crisis

  1. Hold steady and wait for more data
  2. Don’t make fast judgements that are biased towards action based on your current state of uncertainty
  3. Read and digest information before reacting to it
  4. Take a deep breath (or ten) before making any personal or business decisions
  5. Evaluate the situation from all angles and consider best and worst-case scenarios
  6. Take the time to gather information and speak to experts – don’t react to headlines and social media

Key Insights

  1. High anxiety leads to snap decision-making as we attempt to re-exert control over our environments
  2. Snap decisions lead to significantly poorer sales and profit margins for businesses
  3. In order to make better decisions, go slow, consult experts and wait for more data.

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References:

  • HBR: https://hbr.org/2010/05/need-speed-slow-down
  • HBR: https://hbr.org/2020/03/slow-down-to-make-better-decisions-in-a-crisis