Edition 488 – Emotional Decisionmaking

“Logic makes you think: Emotion makes you act”. So says Alan Weiss, one of my business mentors. He’s right of course….most of the time.

Over the years, I’ve come across business owners who are reactive, and not strategic when they make decisions in business. They’re full of emotion and, in the process, throw all logic out the window. They’re driven by what feels good in the moment, and not necessarily what is right in the long term.

Part of me wonders if their decision making in business is driven by their late teen or early twenties selves, when they walked into a bar, and spotted someone attractive across the room. Decisions driven by primal instincts.

When decisions are made emotionally, they usually:

1. Are more expensive, both initially and in the long term.
2. Create conflict – particularly with key people inside the business, and in the family.
3. Are poorly thought through.
4. Often, have little attachment to the future strategy of the business.

If I look back over my almost 40 year career, I can identify an immeasurable number of instances when an emotionally charged decision has created consequences. Like the right property purchase, but at the wrong time. Or the recruitment of a known person into the business, without going through the formal interview process, nor involving others.

Invariably, when business decisions are made emotionally, these same business owners seek validation for their decision, by those in their trusted circle. The problem with seeking validation, is that if you end up hearing what you don’t want to hear, you choose not to hear it, and proceed with the decision anyway. The immediate consequence of this is a shrug of the shoulders, and an almost resignation on the part of the individual whose counsel is sought, that really, their advice is little to worthless. The longer term effect, is that ultimately, when your advice is sought to validate a future decision, the wise counsel says to themselves “Oh, here we go again”.

Except, I’ve now reached the point where I no longer mutter that under my breath, but say it out loud. You’ve engaged me to advise you, not to validate, so if you ask, I’m going to give an opinion.

If you’re making unilateral, emotionally driven decisions inside a family business (and I’ll say at this point, it’s mostly men that do so), then you’re disrespecting almost everyone else in your circle – your family, your executive team, your key advisors, but more than anyone, the key person in your life – your spouse or life partner. By doing so, you little by little, erode those relationships until one of two things happen:

1. The other party stands firm, one day, and then things really get emotional; or,
2. The relationship irretrievably breaks down.

Business owners need to think strategically.

Business owners need to act logically.

Business owners should refrain from making decisions when their emotions are running high – whether that’s for good, or bad reasons.

Anything less, is a step towards, potentially, scuttling your business.

This Week’s Tip

“Family business success is never only the work of a single individual.
So, why are some family business decisions so one-sided?”