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DECISION-MAKING

How To Remove the Emotion from Decision-Making

Before you're faced with a choice that will affect your company's fortunes, it's important to have a system of predetermined rules and outside opinions in place.
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It is lonely at the top, especially when you have a big decision to make. But as a leader, making a decision by yourself only makes it harder. The pressure soon can soon turn into fear, and you'll be beset by emotion, unable to make an unclouded decision based on facts.

Freek Vermeulen, author and associate professor of Strategy and Entrepreneurship at the London Business School, says it's common for smart leaders to make bad decisions--and most of the time, emotions are to blame.

"Whether it's a personal choice or a strategic business decision, emotions often crowd out objectivity. After all, executives are only human, too," Vermeulen writes in the Harvard Business Review. "Precisely because strategic choices are such important ones, loaded with anxiety and uncertainty ... people start to 'follow their heart,' 'rely on intuition' and 'gut feeling,' overestimate their chances of success, and let their commitment escalate."

Vermeulen stresses that great leaders cannot allow emotional bonds to obscure sound judgment. Below, read his three tips on how to make sure you never make an emotional decision when the clock is ticking.

Create your own decision-making rules.

Vermeulen suggests writing a clear, objective set of rules to guide future decisions. He tells the story of how when Intel was still focused on memory chips, co-founder Gordon Moore and then-director of engineering Andy Grove created the "production capacity allocation rule" to decide which products would receive priority in the company's manufacturing facility. When memory chips started losing money, Moore had an emotional attachment to the product that built his company and had trouble letting it go. But since the rule was already in place, the company's middle managers made sure the plant focused on microprocessors. "Because top management had made the decision what sort of product should receive production priority well before it became a concrete issue, the strategic choice became detached from their emotion of the moment," Vermeulen writes. 

Don't decide alone.

Vermeulen's second rule is to never make an onerous decision by yourself. He urges leaders to "tap into the wisdom of the company's internal crowd." Tony Cohen, the former CEO of Fremantle Media, a company that produces shows like the X-Factor and American Idol, tells Vermeulen that he never makes decisions on what new programs the company should invest in by himself. Instead, he has a system that culls opinions from the company's top executives around the world and automatically funds shows that the majority likes. The point is to make sure this responsibility doesn't rest with a single executive, but rather all the executives.

Utilize the 'revolving door' approach.

The "revolving door" approach is a technique that relies on using an outside perspective. Intel's Grove says that when the company was deciding whether to abandon dynamic memory chips (DRAMs), he asked Moore what a new management team would do if they were replaced. "The answer was clear: Get out of DRAMs," Grove tells Vermeulen. "So I suggested to Gordon that we go through the revolving door, come back in, and just do it ourselves." Vermeulen says that if you're stuck in a big decision, you have to pretend you're a new CEO or a turnaround manager who can "see things more clearly." Adopting a third-person perspective helps you tap into an objective mode of judgment--one based on facts and an understanding of the consequences.

Last updated: Jan 15, 2014

WILL YAKOWICZ | Staff Writer | Reporter, Inc.com

Will Yakowicz is a staff writer for Inc. magazine. He has covered business, crime, and local politics for The Brooklyn Paper and was the editor of Park Slope Patch. He has also reported on the West Bank and Moscow for Tablet Magazine. He lives in Brooklyn, New York.




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