You’re at the mall to pick up your dry-cleaning when a vividly-lit store seemingly beckons you. Immediately, a particularly striking luxury handbag you’ve been fantasizing about for weeks catches your eye.
And it’s on sale – today only.
Can we say, “Uh-oh?”
To splurge or not to splurge; that is the question.
One of the core reasons the top 100 CEOs in Canada earned an average of $7.7 million last year is this: they knew how to make a decision – and make it fast.
Sheena Iyengar, provocative thought leader and author of The Art of Choosing, tells us that 139 tasks will comprise the average CEO’s week, with many sub-decisions comprising each task.
The average CEO makes up to 50 percent of those decisions in 9 minutes or fewer. Only 12 percent of the decisions they make require an hour or more of their time. Now consider this: according to a Harvard Business School case study, a CEO will have just 10 percent of the whole story at the time she makes her decision.
And here we are inside the handbag boutique shifting our eyes to and fro the exit and the cash register – what to do, what to do?
How do they do it?
The result of any decision is dependent on that decision’s speed and quality, according to Ben Horowitz, co-founder of $2.5 billion venture capital firm Andreessen Horowitz. He suggests six key factors a CEO might consider before making any decision, which we’ve catered to suit any occasion:
- Will this choice help us get ahead?
- Is this choice possible – and is it possible today? If not, when will it become a possibility?
- Do our capabilities support this choice? Can we increase our capabilities?
- What impact will this have on our wallet?
- Are we prepared to deal with forthcoming issues?
- Will other interested parties (friends, family, co-workers, etc) give a care? Do we care if they care?
Ah, so many questions to consider, so little time (that handbag sale runs out today).
Let our brains do all the work
A 2012 study by the California Institute of Technology suggests that the brain relies on two separate networks to determine how we rationalize our decisions: one assigns an overall value to all choices available while the other determines our overall behaviour.
People living with hoarding disorder have a difficult time making decisions because they overvalue every material option. Thus, the concept of discarding things in exchange for not having those things (including old newspapers and used Q-tips) makes no sense to them.
Interestingly, this is also why people who live with depression have a difficult time making decisions; they undervalue every option because they feel no perceived pleasure from any option.
The best favour we can do our brain is to keep choices to a minimum. The Hick-Hyman Law, developed in the 1950s by British psychologists William Hick and Ray Hyman, suggests the more choices a person is presented with, the longer it will take her to settle on a decision.
A person typically only considers options that are near identical to each other; however, that can still produce infinite options. The optimist (with CEO leanings) might view this as meaning her decision will be almost inconsequential – and thus she can forge right ahead and deal with whatever comes as a result.
4 steps to faster decisions
Once we take all of this into consideration, we can establish a fairly simple set of decision-making steps:
- Consider Horowitz’s six factors to determine all available options.
- Keep your options to a minimum – settle on 2-3 (they’re probably all near identical, anyway).
- Let your brain do the work – assign an overall value to each option and choose whichever appears to have the highest value.
- Don’t stress about it – note that issues will arise no matter what decision you make, but you can settle those issues later with more decision-making (yippee!).
The one thing CEOs know that you don’t
CEOs know that regardless of whether it’s the right decision or the wrong decision at the time, a decision must be made. The sooner that happens, the sooner its rewards can be reaped (or its consequences be dealt with).
Challenge yourself: aim to make half of your decisions this week in 9 minutes or fewer. You can rest easy knowing that the outcome of your decision will present itself soon enough – and you won’t have to make any more decisions until then.
This means you can be in and out of that handbag store before your parking meter expires – with or without the handbag, that’s your call.
By: Jennifer Phillips from Shaw Connect