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7 ways your brain is influencing the decisions you’re making – without you even knowing

21 January 2016

Our brains are powerful. They help us think, manage and make critical decisions. However, they are also susceptible to distraction and invasion from your subconscious. Consequently, we often make mistakes based on irrational, emotional and environmental cues – and this can stop us from making good decisions in life and in business.

Below, we list seven ways your brain fogs the decision-making process. Being aware of them will help you avoid making mental mistakes in the future.

1. Loss aversion

Our brains are emotionally attached to loss. If someone gives you something, you feel joy at the gain, but the feeling of loss if it's taken away is generally much stronger. We are constantly seeking to retain things, and this desire transcends the need to gain – affecting our decision making in terms of long-term benefit if our brains perceive a loss at the forefront. This can perhaps explain many people’s aversion to change – the taking-away of what you’ve come to believe is normal. Understanding this basic aversion to loss (and change) can help you prepare your team for, for example, organisational change or awaiting the outcome of a new business pitch.

2. Focalism

In work, education and day-to-day life, our brains feed off limitation. If we are presented with a limit or a maximum outcome, our mind anchors our desires to that level. We then seek out a compromise between what we want and what we can have. This mental compromise plays an important role in our behaviour. For example, if a team is given daily targets to reach, it may become fixated on that target – potentially limiting its ability to meet/exceed the target or think creatively about how to solve the core business problem inspiring the targets.

3. Confirmation and backfiring bias

Our brains like to be sure of our thoughts. When searching for information to back up a belief or assumption, we often deliberately search for something that will confirm what we think we already know. This effort to rationalise our beliefs is called confirmation bias. Strangely, if we come across information that defies what we believe, it can also enforce our beliefs even more. Just because a search for agreement has backfired, we can still be biased towards our own thoughts – this is called backfire bias.

4. Curse of knowledge

The curse of knowledge is often an issue in collaborative managerial decision-making. It ascertains that the very-well informed may struggle to see or understand the perspective of another individual.

5. The frequency illusion

When our brains are newly exposed to a theme, item or word, we often fall under the illusion that it begins to suddenly appear with improbable frequency soon afterwards. What actually happens is we are simply more aware of the newly exposed theme; future exposures are more poignant in our awareness than before.

6. Outcome bias

Outcome bias refers to our brain’s jumping immediately to judgement based on potential eventual outcome, rather than the immediate effect of one’s decision at the time it was made. For example, a poorly executed strategy that survived due to an extraneous act may be mistakenly judged more positively than it should be – the favourable outcome blinds our perception.

7. Availability heuristic

Considering all the information available to us in our memory, our brains value themes that appear more frequently compared to those that are less prominent. In terms of current affairs and news, it is easy for our brains to perceive that terrorism is more prevalent than it was 40 years ago simply because we hear more about it. Because we are not as aware of things that occurred 40 years ago, we undervalue them and make decisions based on what our minds believe to be true.

Knowing your own mind and how to remove yourself from your own cognitive misconception is key in leadership. Postgraduate study uncovers your cognitive processes and how they apply to effective decision-making in the real world.

If you’re interested in developing your managerial and leadership abilities, speak to one of our enrolment advisors today on 1300 589 882 about our postgraduate degree options.