More Than a Feeling: The Keys to Good Decision-Making, with Baba Shiv

Decision-Making and Emotions

• Yun Ren, a visual artist from Wuhan, China, believes that thinking like an artist can lead to better decision-making.
• He suggests trusting one's instincts and emotions, which play a significant role in decision-making, often subconsciously.
• While emotions can introduce biases, they are also crucial for building confidence and persistence in chosen courses of action.
• Relying solely on rational thinking may not always lead to optimal decisions, as emotions provide essential input for decision-making.
• Storytelling is a powerful tool for influencing others' decisions, as humans naturally make sense of the world through narratives infused with emotion.
• Balancing data-driven analysis with storytelling is important to avoid data paralysis and make confident decisions.
• Leaders should develop both scientific and artistic skills to achieve a balance in decision-making.

The Placebo Effect in Decision-Making

• The placebo effect extends to business decisions, where belief in a positive outcome can influence the interpretation of results.
• A study on wine tasting revealed that the brain extracts more pleasure from wine when it believes it is tasting a higher-priced wine, even if it is the same wine.

Overconfidence and Escalation of Commitment Bias

• Leaders with deep conviction can sometimes be blinded by hubris and fail to recognize mistakes or illegalities.
• To avoid the escalation of commitment bias, leaders should conduct premortems to consider potential negative outcomes and balance their perspective.

Diversity and Innovation

• Diversity in backgrounds, knowledge, and perspectives on executive teams can help mitigate the constraints imposed by experience and encourage innovation.
• Leaders should be cautious about imposing unnecessary constraints on themselves and encourage a culture of experimentation and risk-taking.

Baba Shiv's Research on Decision-Making

• Baba Shiv studies decision-making because he is a very irrational decision-maker himself.
• He believes that most consequential decisions are made quickly and emotionally, rather than through rational deliberation.
• He questions common assumptions about human behavior and asks why the opposite might not be true.
• Diversity, including age diversity, is crucial for generating new ideas and solutions.
• Shiv's research focuses on understanding the role of emotion in decision-making and challenging conventional assumptions about human behavior.