Many of us like to think we are in control…all of the time. From the decisions we make about what coffee to drink in the morning, to the big ones that affect our work, life, and relationships, you might be surprised to learn how little we are actually in control of our decisions.

The truth is, most people make decisions – both big and small – with their subconscious emotional brains in the lead. In fact, a growing body of research supports the theory that psychological undercurrents, all of which are more powerful and pervasive than we realize, influence our behavior and decisions.

So, how do we override our natural tendencies to make the best decisions possible? It all starts will an understanding of how our brains work. Sounds easy, huh?

Psychologists and neuroscientists have conclude that many lack skill in predicting their future tastes, and can be led to erroneous choices by fallible memory and incorrect evaluations of past experiences, according to psychologist and Nobel Prize laureate Daniel Kahneman. Neuroscientific research confirms some of these conclusions through research that shows that the brain is heavily influenced by subconscious emotional reactions from its more primitive centers. This means we are not quite as in control of our reasoning capabilities as we might like to think!

Our brains are often flawed when making decisions. Because these flaws are hardwired into our thinking process, we often fail to recognize them. This means they can undermine everything! So, let’s take a look at these pesky faults…

  1. Loss aversion – This is our tendency to go to great lengths to avoid possible losses. Feelings associated with the word loss stir our emotional brains and influence action. In reality, we often overreact to perceived losses.
  2. Commitment – This is our tendency to stick with the status quo. We’re predisposed to perpetuating more of the same. It’s an inherent part of our thinking. Deep within our psyches, we are self-protective and risk-aversive.
  3. Value Attribution – This is our inclination to imbue a person or thing with certain qualities based on initial perceived value. Value attribution serves as a quick mental shortcut to determine what’s worthy of our attention. When we encounter new objects, people or situations, the value we assign to them shapes our future perceptions of them.
  4. Diagnosis Bias – This refers to our blindness to all evidence that contradicts our initial assessment of a person or situation. Managers often overestimate their ability to form objective opinions and underestimate their subconscious’ biases.
  5. Certainty Bias – This is where overconfidence leads us to discount inconvenient truths. After gathering as much information as possible and weighing all of the arguments, leaders must make decisions and embrace and attitude of certainty and confidence. Pursuing others to execute the plans is the next step. Certainty, however, can lead to other errors, such as failure to adjust plans, when required, and shutting out conflicting information. The way to counteract this is to encourage dissonance and the group questioning of decisions.

Each of us is susceptible to the irresistible pull of irrational behavior along with some of the faults listed above. Only when we gain insight into our irrationality can we see the extent to which it affects our work and personal lives. Fascinating patterns may emerge until we can better master our behaviors and improve our decision-making. Decisions are the lifeblood of action, and little gets done without them. In fact, decision effectiveness may even be affecting your company’s bottom line.

A survey of international executives from 760 companies with revenues exceeding $1 billion in 2008 found that decision effectiveness and financial results correlated at a 95% confidence level or higher for every country, industry and company size. Companies that were most effective at decision- making and execution generated average total shareholder returns of nearly six percentage points higher than others.

The good news is that leaders and organizations as a whole can improve their decision-making skills by being aware of their brain’s faulty predispositions. Decisions can be complex, and we are never going to get everything right, but we can improve our chances of being right more of the time than not! We can improve decision effectiveness by becoming more aware of traps, bias, and logic flaws that lead to errors.

Are you ready to take a look at your company’s decision-making skills, or even your own? Ask yourself:

  1. When looking back on critical decisions, how often have you chosen the right course of action?
  2. How do you rate the speed of your critical decisions compared to competitors?
  3. How often do you execute critical decisions as intended?
  4. How much effort does your company put into making and executing critical decisions?