15 July 2009
Successful Intentions Newsletter
Hi ,
Just how rational do you think you are?
It turns out we human beings are emotional, short-sighted, easily confused, and distracted. And that's on a good day!
So much for economic theory and belief in the "invisible hand" of the free market. What's needed now, post-GFC, is a psychological reality check. Economic behaviour cannot be assumed to be rational.
For example:
- The word "free" is a powerful lure that will almost always sway us from a better deal and toward the "free" one.
- Most of us, given the opportunity, will cheat - but just enough to rationalize our behaviour.
- If one person in an established team is cheating the others are likely to increase their cheating as well.
- But if we're reminded of our own ethical standards we're less inclined to cheat.
- If we're annoyed with how we're being treated in a commercial exchange we're likely to seek revenge, not just on the agent but also the company.
- In fact, the irrational desire to punish is associated with a feeling of pleasure as indicated by measurable activity in the part of the brain which experiences reward!
- Yet, the word "sorry" seems to (mostly) counteract our annoyance.
There's no getting away from it. We are predictably irrational and virtually incapable of making good decisions! But here are 8 steps to improve the odds:
- Make a list of everyone who is likely to have a stake in the outcome of your decision.
- Identify which of your most strongly held values are at the core of your decision.
- Lay out the range of options available to you.
- Check for any distortion from unbalanced self-interests.
- Reflect on any misleading memories and past judgements that might be aroused by the decision.
- Ask yourself, "what's the wisest thing to do?"
- Notice your emotional state in relation to the decision. What are you most afraid of?
- Take time out and then review your decision-making process again. What are the "red flags" that stand out for you?
In the end , there are only three actions you can take: No action; the "perfect" action; or any action that at least gets you moving in the right direction no matter how imperfect!
If you like this newsletter, please forward it to a friend (subscribe here).
And read my "Wisdom Circle" blog for musings, research, and applications of practical wisdom!
Keep your intentions clear,
Peter Webb
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