Do you think that in order to make a good decision, should we rely on rationality or emotion? Rational analysis, deduction, and thinking are usually regarded as the golden rules for decision-making. However, Baba Shiv, a professor of marketing at Stanford University's business school, says a calm and rational brain is not the only condition. He pointed out that the rational brain is only responsible for 5%~10% of our decision-making, "Emotions have a profound impact on decision-making, and we don't realize it. 」
Schiff's research focuses on neuroeconomics, particularly on how the neural structures involved in emotions and motivation influence the decision-making process and experience that allow people to make final decisions. As a "scientist", why does he attach so much importance to the role of "emotions"? He actually relies on research results.
Results: Whether it succeeds or not, it is the brain's own interpretation
In his experiment, subjects were told to taste five wines at different price points, ranging from $5 to $90. But in fact, only 3 of the 5 glasses were served, and 2 of them were poured 2 times each. As subjects tasted each wine, Schiff monitored their cranial nerve activity. It was found that even if you were drinking the same wine, but if your brain thought that the wine you were tasting was more expensive, the activity of the happy area would be higher. "That's why I don't think there are successes or failures in life, only results. Because no matter what the objective success or failure is, it is up to the brain to interpret and judge whether it is successful or not.
From an early age, we have been taught to be as rational as possible when it comes to making big decisions, a hypothesis that has permeated Western philosophical thought since the Enlightenment. But this ignores the fact that people grow and evolve with their emotions. In the final analysis, what the rational brain is good at is often not rationality, but rationalizing what the emotional brain has already decided to do. But people can't perceive it at the level of consciousness. Schiff gave an example of how people try to get rid of cognitive biases when it comes to making important decisions about investments, acquisitions, hiring senior managers, and not wanting to fall victim to bias. So traditionalists believe that you need to think carefully and consider the pros and cons: what are the costs, what are the results, what are the benefits from a series of actions, what are the probabilities? But there is a second goal to decision-making, which Schiff calls "decision confidence," which is our belief that we have made the right choice.
Understanding "Confidence in Decision-making": A sense of conviction that makes you firm in your choice
"Because going from A to B is never going to be a straight road. When you encounter difficulties and bumps in the road, if you have doubts, you are likely to give up the choice early," in other words, the so-called decision-making confidence, that is, confidence and conviction, is essentially based on emotion, not rational judgment. Many companies like to say, "We're a data-driven organization," and Schiff will say, "yes, that's why you're slow to make decisions." He believes that to make better decisions, you have to think more like an artist.
In the shopping mall or in life, there will always be a moment when people "must" move forward. You can keep the same path or create a different script. In the dilemma, I have to ask myself, which one resonates with me the most, and the decisions made in this way can be carried out with more confidence. But there's a trap to watch out for, as seen by Sam Bankman-Fried, the founder of crypto platform FTX, who was recently sentenced to 25 years in prison. He believed in his beliefs quite a bit, and he was sure where he was going to take the company. However, this has led to illegal acts.
Schiff reminds you that all you have to do is to examine the facts of what happened from time to time and force yourself to consider all the negative factors. It's not going to make you quit halfway, but the brain will know that I need to deal with something that isn't so happy first, but the negative factors will fade away and the positive results will come in the future. That's how you think about it.
The Stanford professor doesn't think that reason is bad and emotion is the best. Rather, he believes that a good leader is more than just being a scientist. "Today, most leaders are trained as scientists to make very sound decisions. What we need is a good balance between scientific thinking and artistic thinking, because artists have dreams, and dreams are what motivate us," he said.