Executive Coaching How to Make Decisions Under Stress

Executive Coaching: How to Make Decisions Under Stress

Every day, when you wake up, you start making decisions. Smart decisions, difficult decisions, moral decisions, emotional decisions, managerial decisions, all kinds. Your decision-making process starts. Good to know that most of those decisions are habitual.

The Consequences of Our Decisions Making

We defined that we are some decision-making creatures. Unfortunately for us, the way we make decisions is heavily biased.

Human decision-making is strongly biased by unconscious mental processes (system one) that sometimes produce good outcomes quickly but sometimes cause us to make irrational choices. Our rational mind (system two) rarely intervenes. Fear of loss influences human decisions more than expectation of gains.

Science Direct

Now, when you are running a company as a founder CEO, or executive, the quality of those decisions is crucial. Some decisions can cause irreversible results, even destroying a company. Yes, one decision can dramatically change everything in one way or another. 

Bad Decisions that Led to Failure | Example

Think about investing everything and betting all cards in one direction before having a product-market fit. That’s common mistake overconfidence produces in founders.

You can change behaviors and create the demand before people know what you have to offer, but that’s a very costly journey. You need to be generously capitalized in order to follow in Steve Jobs’ footsteps. Most startups don’t have that luxury.

For brick and mortar businesses decision, choosing the right location can be the factor between success and failure.

And, let’s see some classics:

How to Make Decisions à la Blockbuster

They made a series of bad decisions, but a couple of them had the potential to be disastrous.

Netflix wanted to sell its company to Blockbuster for $50 million in 2000. If the deal went through Netflix would have managed Blockbuster’s online business. Speaking about what happened, Netflix’s former CFO Barry McCarthy says Blockbuster “laughed us out of their office.”

Indigo9Digital

They also underestimated their rivals. Blockbuster stated on several occasions that Redbox and Netflix are just tiny companies, and so, they don’t want to give up the millions of dollars they make on late fees. That decision came back to bite them.

The World’s Worst Video Game – Atari

Atari knew that the E.T. video game was a disaster but they thought with enough deceiving marketing around the holidays plus the power of their brand it will turn into a success.

Atari has also another one with Steve Jobs, next to HP.

“So we went to Atari and said, ‘Hey, we’ve got this amazing thing, even built with some of your parts, and what do you think about funding us? Or we’ll give it to you. We just want to do it. Pay our salary, we’ll come work for you.’ And they said, ‘No. So then we went to Hewlett-Packard, and they said, ‘Hey, we don’t need you. You haven’t got through college yet.’

Steve Jobs

Staying in the Past with Kodak

Kodak wanted to protect the film business so much that they refused to sell digital cameras completely. When they realized this it was too late, and they had a cash flow issue. Instead of seeing the future, they acquired other small companies that made it impossible for them to catch up quickly enough.

Overview About How to Make Decisions Under Stress

“Ok, Cristina, I got your point, but now what?” – You would say. “What can I do to make those good decisions on a daily basis? Should I use some techniques, or maybe do as Jeff Bezos is doing, making only three good decisions a day?

I’ll never encourage you to copy someone else’s successful recipe. It might work, or it might not. If that isn’t yours, you’re exposed.

For example, I’m a natural multitasker, and I know what’s the consensus about that in my industry. I care less. The same goes with being a night owl instead of waking up at 5 am.

I created the personalized mental switches that work very fast for me. I learned by trial and error how to make decisions for myself, my family, and my clients. If you constrain me to take a couple of decisions per day, I would be a miserable soul. Even if I’m also a long-term thinker, in today’s environment being quick and testing things out I find to be very handy. That’s my way.

Now, if you need to find your way, where can you start – you’ll ask.
Knowing the basics and some neuroscience will guide you well.

Decision-Making Process | Neuroscience

First and foremost, you need to keep in mind that under negative stress statistically, your decisions will be wrong. Hasty, rushed decisions under stress are almost always bad.

Why?

Because in a negative state, our brain doesn’t function well. All the blood and attention go to the extremities, and our neuronal circuitry is chaotic. Stress and agitation are designed to mobilize our body to take physical actions, not mental ones. We cannot establish the right circuits that enable those good decisions.

There are two functions involved in the decision process, according to scientists. The first function is to identify the sources of conflict and identify the optimal response, and the second is to exert control and resolve the conflict.

An interesting thing to know is that the human brain it’s not designed to make the right decisions. That’s because our reward system is optimized for the evolution of our species and is also linked to anything that makes us feel pleased. The impulse to feel good at the moment could not necessarily mean making the right decision.

Now, when it comes to regulating our mind to function properly we need to focus on the body. Once your mind is disorganized, it is very difficult to control it through conscious processes. But since mind and body are interlinked, you can use that to your advantage.

Calmness Is Your Biggest Strength in Decision-Making

Imagine you are in the middle of a glass bowl full of water and sand.

The water and sand represent all the information you got, your entire horizon. If the water in the glass is calm, you’ll see clearly in all directions, assessing everything with clarity. The sand will lay nicely at the bottom, and the water will be clear and transparent for you.

But once you agitate that glass, the sand comes into the picture, and your vision will be blurred or obstructed completely. The moving water and the sand represent the conditions you are in while stressed or anxious in front of a decision. Which way to go? You won’t know for sure. Statistically, you’ll miss the target.

Attention!

The same happens when you are too excited as well. The ‘excited’ water will also hold a lot of sand. Clarity is not there.

The best decisions are made in calm waters, almost like a Zen mode. Those are favored by the right neurochemistry, physical charge, and overall clarity.

How to Create a Calm State Quickly to Make Good Decisions?

I created a video couple of years back in my leadership masterclass to illustrate some versions. Check it out and put any of those techniques to practice.

How to Make Decisions Under Stress | Leadership Training

Final Words

Once your mind becomes silent and relaxed, you can hear the sound of wisdom. Then, you’ll be naturally guided to make the right decisions. Short napes during the day are also very good. You deactivate the momentum of stress.

Sleep quality is crucial for a sustained good state of quality work and wise decisions.

It’s OK to experience short-term stress, and sometimes it’s even beneficial. Meanwhile, long-term stress that’s linked to poor sleep is never good because it brings illness. We now know that most illnesses are long-term stress-related. Three nights in a row with bad sleep means long-term stress.

Once you master calmness through the techniques I suggested, or any other methods you might find suited, your decision-making ability will change the game for you. As a bonus, your overall well-being and health will improve.

Cristina Imre – The Founder Coach That Takes Your Success to Heart!

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