25/08/10

By Ian Moore

I will start by stating the obvious, we make decisions with our brains. But let us consider what our brains are for. They have evolved over hundreds of thousands of years to help us survive and to that end they are highly effective decision making instruments. However in modern day situations, and especially in business, these mechanisms for decision making may not be the best. So rather than spending time on developing sophisticated decision making strategies it is bound to be useful to understand some of the mechanisms that our brains have developed to make decisions. By understanding these mechanisms we can become sensitised to their shortcomings and so develop approaches to counteract these shortcomings and thus make better decisions.

Let us just think for a moment about bad decisions and how much they cost. Think for a moment about how many people in your organisation make bad decisions. How much money is your organisation losing each day because of bad decisions? If you had a small improvement in decision making, say 10%, how much would that save: on a daily basis; over a year. This is perhaps difficult to quantify but if even just one major bad decision could be turned into a good decision then the benefits could be immense.

We can make better decisions. The good news is that we have a brain! In our brain we have over ten thousand million neurons and the number of possible interconnections between these neurons is 10 followed by 100 zeros. We have an immensely complex piece of machinery in our brains. However, is the brain fixed in the way it processes information?

In order to drive a traditional black cab in London a taxi driver has to pass 'the knowledge'. This is a test about the streets of London and the best way to navigate around them. It has been known for some time that the hippocampus, an area of the brain, is responsible for processing geographical information. In the year 2000 a team from University College London scanned the brains of some taxi drivers and found that their hippocampuses were bigger than those of normal people. This is a really significant finding! It shows that exercise and practice can physically develop areas of the brain and increase the connectivity of the neurons.

The bad news is that the brain has a very specialist design. It has evolved over hundreds of thousands of years for survival purposes and not necessarily for making the best business decisions. Part of the specialist design is our memory systems. When brain scans are done on chess players some interesting results are found. Masters and Grand Masters seem to have activity towards the rear of the brain which is normally associated with our memory systems. Less competent chess players tend to have most activity towards the front of the brain, in the pre-frontal cortex, which is normally associated with decision making. When we make decisions are we using our memory of past situations or analysing each situation anew?

Large areas of our brains have developed for pattern recognition. This is obviously useful for recognising objects and faces. Unfortunately we also tend to see patterns when there are actually none there.

Our brains are also very good at establishing habits. These are very useful 'short cuts' to our decision making processes. We don't need to think about everything that we come across on a daily basis. Let's have a look at one habit we have developed — how we fold our hands.

So let's try it out. I'd like to ask you to fold your hands. If you look at your hands you will notice that one index finger is above the other one. When we are young we have to learn to fold our hands like this. Each way is equally likely at this point. However a habit quickly forms and one way becomes dominant. When we are older we will usually only fold our hands in one way. So for most of our lives we have been folding our hands in only one way. You would think that a habit as well established as that would be hard to break. But lets try this. Try folding you hands so that the other index finger is on top. What does it feel like? Most people find this quite uncomfortable but bear with me for a moment. Let's try slowly folding our hands back to the original position and slowly back again to the second position.
And then back again,
and back again,
and back again,
and back again,
and back again,
and finally back again.

Now just shake your hands.

So let's try it again. I'd like to ask you to fold your hands again. Can you remember if this is the way you did it originally?

What's interesting about this is that most people, after only five repetitions, feel much less awkward. Some people cannot even tell the difference any more. This is a very simple example of how a life long habit can be overturned (or at least lessened) by only five practices at doing it a different way.

We have seen that our brains have some limitations when it comes to decision making. The good news is that if we understand what these limitations are we can reprogramme even long established habits. We can also grow parts of our brain.

So if we can understand how our decision making works, we can spot the deficiencies in our decision making. Knowing what these deficiencies are we can take countermeasures to improve them.

As part of the Academy Community, professional speakers such as Ian provide excellent, practical and, in many cases, hard-hitting topics for Managing Directors and CEOs. They know that by inspiring the leader of a business to change his or her thinking and to help them motivate themselves and their people for the future, they will develop and grow their companies. For more information visit www.chiefexecutive.com
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Watch a video of the Academy for Chief Executives Speaker Showcase at The Grand Connaught Rooms in 2009, where speakers talked about new ideas.

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Ian Moore runs workshops and gives presentations on how people and organisations can improve their Decision Making by understanding how they make poor ones. For more information see www.unthinkablethinking.com or email Ian at: ian@unthinkablethinking.com

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