How to make your brain make better choices
What is exactly a healthy brain?
Researchers first started paying attention to entrepreneurial stress a few years ago, when a series of suicides revealed that the startup community is suffering from a depression epidemic.
While studies suggest that genetics are partially to blame for the crisis, the nature of entrepreneurial stress plays a major role in pushing founders over the edge. If you plan on starting your own business, learning the right stress management techniques is an absolute must.
Why is it important to understand decision-making?
Business and work are almost exclusively about making decisions. If you don’t have to make a lot of decisions at your job, watch out – you’re probably about to be replaced by a robot.
The problem is that we don’t actually have much control over our decision-making process.
There are two main reasons for this:
- First, evolution has molded the human brain into a complex mechanism that often contradicts itself.
- Second, even when we think we’re being rational, our decisions are strongly affected by our physiology.
This means our lives are driven by constantly repeating a process we don’t know how to control or even execute properly.
In fact, studies show that bad habits and addictions stem from poor decision-making caused by abnormal interactions between various areas of the brain responsible for making decisions. And a 1979 experiment by psychologist Benjamin Libet revealed that we only have about 200 milliseconds to veto an action before our primal instincts kick in.
Understanding how to control the decision-making process is essential. It can give us the power to break patterns of behavior and change our lives for the better.
How do people make decisions?
The short answer is that we don’t know for sure, and what we do know is pretty scary. Our brain is a product of evolution. What we have inside actually looks like 3 different brains: the lizard brain, the mammalian brain (the limbic part of the brain), and our learning brain.
The learning brain contains the prefrontal cortex, which is our center of rationality and mindfulness. We don’t always use this part of the brain. We have the Reticular Activating System (RAS), which is like a toggle switch between the prefrontal cortex and the limbic system.
When we are emotionally charged or stressed, it switches to our limbic system. The switch makes our brains go into auto-pilot mode. Our instincts take over and we stop thinking, falling back on pre-set reactions or answers we learned from previous experiences. This is usually when we fall victim to cognitive biases.
When we are relaxed, the RAS switches us back to the cerebral cortex so we can act rationally.
Although we can’t always predict what will cause the RAS to flip the switch, psychologist Martin Moore-Ede says there are about nine common triggers:
- a sense of danger, interest or opportunity
- muscular activity
- time of day or the circadian clock
- sleep bank balance
- ingested nutrients and chemicals
- environmental light
- temperature and humidity
- sound
- aroma
What happens when we’re stressed?
What are some other big stress factors?
- A lot of responsibility. Founders are responsible for the livelihoods of their staff on top of having to worry about where their own next paycheck is going to come from.
- Constant danger. Running out of cash, unexpected server issues, losing key employees: the fact that 90% of startups fail illustrates the constant danger founders live with.
- Decision making. Decision fatigue is a well documented phenomenon, and refers to the stress people experience from having to make too many decisions — even if those decisions are small.
- Non-stop deadlines. Unlike employees working on a 9–5 schedule, entrepreneurs don’t have the option to simply leave work at the end of the day.
- Taking on too many roles at once. Founders have to know how every single aspect of the company works, from marketing and PR to product design and engineering.
- Rejection. As we already discussed, founders have to bounce back from disinterested investors, dissatisfied clients and negative feedback about their product on a daily basis.
Are our decisions rational?
The rational system is connected to the prefrontal cortex of the brain and is capable of in-depth analysis and logical thought. It is also extremely lazy and can only perform one task at a time.
If you want to test your ability to focus on more than one task at a time, try the selective attention test by Chris Chabris (Union College, New York) and Daniel Simons (University of Illinois). The intuitive system is fast, automatic, and extremely powerful. This system is a great multi-tasker, and is responsible for most of the things you say, do, and think.
Most of our decisions are made on auto-pilot and rationalized by our logical brain after with a coherent, plausible explanation. Professor Kahneman’s discoveries were so groundbreaking that he was awarded the Nobel Memorial Prize in Economic Sciences in 2002.
Why aren’t our decisions rational?
How do we know? Monkeys have the same cognitive biases as humans. Dr. Laurie Santos, a psychologist at Yale University, has been investigating how deep seated these cognition mistakes are. In a series of experiments called Monkeynomics, Dr. Santos taught a troop of monkeys to use money. It turns out monkeys fall victim to same cognitive biases. For example, they exhibit loss aversion – the tendency to prefer avoiding losses to acquiring equivalent gains.
If our biases and irrational decisions are so deeply rooted in our evolutionary past, they may be impossible to change.
“What we learn from the monkeys is that if this bias is really that old, if we really have had this strategy for the last 35 million years, simply deciding to overcome it is just not going to work,” Dr. Santos explains, “We need other ways to make ourselves avoid some of these pitfalls.”
So knowledge is power. While we many not be able to change ourselves, being aware of our cognitive limitations can give us the power to reduce irrationality.
Why is our brain so lazy?
25% of the energy your body generates is consumed by your brain, and decisions that require willpower or self-control are huge energy drains. Studies show that exercising willpower takes a heavy toll on mental energy levels and glucose levels – the brain’s preferred type of fuel. This is one of the reasons you’re more likely to eat a whole bag of chocolate chip cookies when you’re stressed.
Our first impulse is always to use the intuitive system of thinking, or the limbic part of the brain. Then, all we need to do is make out impulsive decisions look rational.
Voila! Energy is preserved and our ego is left intact.
How to make best kind of decisions?
For our brain, the best decision is not having to make a decision at all. The next best thing is to use a pre-set template or go with the default option. These kinds of decisions don’t suck up a ton of energy. This is why we frequently end up going with the default option and put off making a decision as long as possible.
Dan Ariely, Duke University professor and author of Predictably Irrational, talks about our love of default options in his TED talk.
Take a look at organ donor statistics for EU countries:
Why are people from Denmark, the UK, the Netherlands, and Germany so hesitant to be organ donors? The answer is more simple than you think. In these countries, people have to check a separate “Organ Donor” box on their driver’s license application if they want to be an organ donor. In other countries shown in the chart, people have to check a box if they DON’T want to be an organ donor.
The majority of people prefer to not make any decision at all and simply go with the default option. We also hate having too many choices – a phenomenon called choice paralysis or analysis paralysis. We end up choosing anything just to get the process over and done with or running in the opposite direction.
For example, a study by Sheena Iyengar, Professor of Business at Columbia University, showed that shoppers were less likely to buy jam when they had more options to choose from. In the study, 30 percent of shoppers ended up making a purchase when the selection was limited to 6 types of jam. However, only 3 percent made a purchase when there were 24 types of jam to choose from.
Making decisions is simply too much work. That’s why our brains opt out of making them whenever they can.
Why is it hard to focus on making the right decision?
For example, a 1934 American Child Health Association study sent 1,000 children who had screened negatively for tonsillectomy in for further assessments. About 45% of the children were assessed as requiring a tonsillectomy. This happened because the screeners were not diagnosing objectively, but relying on their expectation that 45% of the children they saw would require a tonsillectomy.
Does the time of day influence our decisions?
Absolutely. Mornings are the best time to make decisions. The main reason is that every decision we make drains our energy, which means that we experience a phenomenon called “decision fatigue” toward the end of the day. We simply have more resources to use our prefrontal cortex in the beginning of the day. According to Professor Baba Shiv, our biochemistry also has a lot to do with it. Dr. Shiv says serotonin levels are higher in the mornings, which helps calm our brain so we can think rationally.
A 2010 study by Shai Danziger from Ben Gurion University of the Negev is a great example.The study found that judges were more likely to grant parole requests early in the morning and immediately after taking breaks. The longer the judges worked, the less likely they were to grant parole to prisoners.
Take a look at the graph below:
A prisoner’s chances of parole start off fairly high (around 65%) and quickly plummet within the span of just a few hours. The pattern repeats after each break.
So the decision-making part of the brain is kind of like a muscle – the more we work it, the more tired it gets. Dr.Amantha Imber, an organizational psychologist, recommends making major decisions around 11 am whenever possible. If you have to make an important decision later in the day, make sure to schedule a break beforehand.
How does stress impact our decisions?
Research on securities traders by Andrew Lo and Dmitry Repin suggests that emotional responses are a significant factor in the real-time processing of financial risks, even among the most rational investors in the economy.
However, there are gender differences. Studies show that women are less likely to engage in risky behavior under stress than men. It’s possible these differences happen because men are more likely to initiate an attack when under threat. Women opt for the “flight” response, which is strategically wiser and less energy-consuming.
How can stress affect your business?
That’s why Tyler Tervooren, founder of Riskology.com, recommends avoiding making big judgement calls under stress altogether.
“It doesn’t matter what kind of or how much stress you’re under,” Tervooren says, “If you’re feeling it, you’re going to slip up when it comes to making good choices.”
According to Y-combinator co-founder Paul Graham, the reason most startups fail is simply because the founders become demoralized.
Moral of the story? Your brain is one of the most important tools in a startup, which is why you need to make sure it functions properly. When you’re under chronic stress, your brain is flooded with hormones that kill your attention span, impair memory, and lead to bad judgement calls.
How do I know I’m cracking under pressure?
- You catch yourself thinking your investors are terrible, your users are stupid, and all of your coworkers are letting you down
- You start feeling like you have no competitors on the market because nobody has a product quite like yours
- You feel like you and your vision are constantly misunderstood
- You avoid talking about your project, launching new versions, selling it to people, pitching, etc.
All of these are signs that your brain has given up and you need time to rest and recover.
What we can do to be more objective?
- Make your decisions in the morning
Mornings are the best time to make decisions. Your serotonin and dopamine levels are high, and you’re not bogged down by decision fatigue. If you have to make an important decision in the afternoon, try taking a nap or taking a break to reset your brain. - Eat first
We all know the rule about not doing grocery shopping on an empty stomach, right? Apply a similar rule here and don’t make decisions when you’re hungry. Eat before meetings or phone calls where you’ll be expected to make decisions. - Limit your choices
We often settle for default options or let others decide for us because decisions are too much work for our brain. This is especially the case when we have more than two options to choose from. You can help your brain out by cutting out the extra options you don’t need. Narrow your choices down to a tiny shortlist and you’ll have an easier time of making a final decision. - Open a window
Keeping CO2 levels low in your home or workspace is really important for all cognitive functions, not just decision-making. Adding plants will certainly help, but try to keep fresh air circulating as well, particularly in high-traffic areas. - Use a foreign language
If you know one, this could be really useful. Particularly when there are lots of emotions involved, or you want to protect yourself against things like emotional marketing strategies. Try explaining the situation to yourself in a foreign language and see if you process the information differently. - Go to sleep
It will boost your levels of serotonin, which will help lower your stress levels. For example, one study found that losing a full night’s sleep caused people to adopt much riskier gambling strategies. - Meditate
A 2013 study found that 15-minutes of mindfulness meditation can help people make smarter choices. Meditation significantly reduces the risk of making impulsive decisions. Next time you need to make a decision, use meditation techniques, take a few deep breaths and think about the pros and cons of your next move in a pragmatic and mindful way.
Anything else about my brain I should know about?
- Don’t keep your emotions bottled up. Loneliness can be one of the biggest stress factors for startup founders, so it’s important to find people to confide in. Make time in your schedule to talk to someone who understands you – your mom or best friend from college, for example. Be sure to thank your listeners later. Gratitude has been proven to help people stay grounded.
- Select your team carefully. Don’t hesitate to part with members of your team who rub you the wrong way. It may be tempting to convince yourself that you’re overreacting, but at the end of the day anybody who gets on your nerves is an additional stressor that you can’t afford.
- Cut down on the number of decisions you have to make. Your brain gets tired when you have to make too many choices, which is why superstar founders like Mike Zuckerberg wear the same outfit every day. You don’t have to go that far, but think about using a service that does meal prep for you, for example, and definitely learn how to delegate tasks.
- Pick the right co-founder. Make sure it’s somebody who doesn’t think like you and doesn’t always agree with you. At the same time, they need to be an emotionally supportive person so you can build each other up, not tear each other down.
- Do monthly reports. Make sure to take time to write down a list of what worked, what didn’t work, and people who helped you along the way. It will help you stay focused and grounded. Share the reports with your team to make sure that everybody is on the same page.
