Monday, September 20, 2010

Decision Making and the brain

I will start by stating the obvious, we make decisions with our brains. But let us consider what our brains are for. They have evolved over
hundreds of thousands of years to help us survive and to that end
they are highly effective decision making instruments. However in
modern day situations, and especially in business, these mechanisms
for decision making may not be the best. So rather than spending time
on developing sophisticated decision making strategies it is bound to
be useful to understand some of the mechanisms that our brains have
developed to make decisions. By understanding these mechanisms we can
become sensitised to their shortcomings and so develop approaches to
counteract these shortcomings and thus make better decisions.

Let us just think for a moment about bad decisions and how much they cost. Think for a moment about how many people in your organisation
make bad decisions. How much money is your organisation losing each
day because of bad decisions? If you had a small improvement in
decision making, say 10%, how much would that save: on a daily basis;
over a year. This is perhaps difficult to quantify but if even just
one major bad decision could be turned into a good decision then the
benefits could be immense.

We can make better decisions. The good news is that we have a brain! In our brain we have over ten thousand million neurons and the number of
possible interconnections between these neurons is 10 followed by 100
zeros. We have an immensely complex piece of machinery in our brains.
However, is the brain fixed in the way it processes information?

In order to drive a traditional black cab in London a taxi driver has to pass 'the knowledge'. This is a test about the streets of London and
the best way to navigate around them. It has been known for some time
that the hippocampus, an area of the brain, is responsible for
processing geographical information. In the year 2000 a team from
University College London scanned the brains of some taxi drivers and
found that their hippocampuses were bigger than those of normal
people. This is a really significant finding! It shows that exercise
and practice can physically develop areas of the brain and increase
the connectivity of the neurons.

The bad news is that the brain has a very specialist design. It has evolved over hundreds of thousands of years for survival purposes and
not necessarily for making the best business decisions. Part of the
specialist design is our memory systems. When brain scans are done on
chess players some interesting results are found. Masters and Grand
Masters seem to have activity towards the rear of the brain which is
normally associated with our memory systems. Less competent chess
players tend to have most activity towards the front of the brain, in
the pre-frontal cortex, which is normally associated with decision
making. When we make decisions are we using our memory of past
situations or analysing each situation anew?

Large areas of our brains have developed for pattern recognition. This is obviously useful for recognising objects and faces. Unfortunately we
also tend to see patterns when there are actually none there.

Our brains are also very good at establishing habits. These are very useful 'short cuts' to our decision making processes. We don't need
to think about everything that we come across on a daily basis. Let's
have a look at one habit we have developed – how we fold our hands.

So let's try it out. I'd like to ask you to fold your hands. If you look at your hands you will notice that one index finger is above the
other one. When we are young we have to learn to fold our hands like
this. Each way is equally likely at this point. However a habit
quickly forms and one way becomes dominant. When we are older we will
usually only fold our hands in one way. So for most of our lives we
have been folding our hands in only one way. You would think that a
habit as well established as that would be hard to break. But let'
try this. Try folding you hands so that the other index finger is on
top. What does it feel like? Most people find this quite
uncomfortable but bear with me for a moment. Let's try slowly folding
our hands back to the original position and slowly back again to the
second position.

And then back again,

and back again,

and back again,

and back again,

and back again,

and finally back again.

Now just shake your hands.

So let's try it again. I'd like to ask you to fold your hands again. Can you remember if this is the way you did it originally?

What's interesting about this is that most people, after only five repetitions, feel much less awkward. Some people cannot even tell the
difference any more. This is a very simple example of how a life long
habit can be overturned (or at least lessened) by only five practices
at doing it a different way.

We have seen that our brains have some limitations when it comes to decision making.

The good news is that if we understand what these limitations are we can reprogramme even long established habits. We can also grow parts of
our brain.

So if we can understand how our decision making works, we can spot the deficiencies in our decision making. Knowing what these deficiencies
are we can take countermeasures to improve them.

Ian Moore runs workshops and gives presentations on how people and organisations can improve their Decision Making by understanding how they make poor ones. For more information see:

or email Ian at:

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