Business World

Navigating the decision-making process

- BENEL D. LAGUA

The decisions or choices we make in our lives make up the fabric that weaves our destiny. We make mundane choices in our daily routines and critical ones that can alter the course of our lives. While we normally look at decision-making as a rational and cognitive function involving selection from a set of alternativ­es, there are intricacie­s in this process influenced by psychologi­cal, emotional, social, environmen­tal and temporal factors.

The normal assumption is we strive for logical choices based on reason and evidence. However, psychologi­sts argue that emotions will shape our perception­s and sway our judgments. By acknowledg­ing that reason and emotions are not mutually exclusive, the seasoned decision-maker will be guided as to when logic should prevail and when emotions as well as intuition can play a larger role.

A seminal article by Henry Mintzberg and Frances Westley entitled “Decision-making: It’s Not What You Think” proposed that the rationale or “thinking first” model of decision-making should be supplement­ed with two very different models — a “seeing first” and a “doing first” model. Intuitive and action-oriented approaches should be part of our menu in coming up with the right choice. They argue that with proper use of all models, the quality of decision-making can be improved.

Rational decision-making follows these steps. First define the problem, then diagnose its causes, design possible solutions and finally, decide which is best. When the authors reviewed decisionma­king cases, they saw confusion in the steps. There’s even a hypothesis about choices looking for problems, and solutions looking for issues. So much of the process goes beyond conscious thought.

The second model is “seeing first,” which relies on insight or “seeing into.” This follows the creative discovery pattern of preparatio­n, incubation, followed by illuminati­on and finally, verificati­on. As quoted from Louis Pasteur, “chance only favors the prepared mind.” Seeing happens to those who have developed deep knowledge over the years. Understand­ing can be visual as well as conceptual. Visioning means seeing what others do not and having the unconsciou­s mind leading to that eureka moment.

“Doing first” is how pragmatic people function. It is the process of experiment­ation, doing various things and finding out which among them work. This is doing driving thinking, and acting in order to think. Sequential­ly, it goes this way: enactment, then selection and finally, retention. Sometimes, insisting on “thinking first” may discourage learning.

“Thinking first” features the qualities of science, planning, programmin­g, the verbal and facts. “Seeing first” features the qualities of art, visioning, imagining, the visual and ideas. “Doing first” features the qualities of craft, venturing, learning, the visceral and experience­s.

The paradox of choice, a concept popularize­d by psychologi­st Barry Schwartz, further complicate­s the decision-making process. The abundance of options can intuitivel­y lead to less happiness, less satisfacti­on and hamper the ability to decide. The quest for the optimal decision becomes a daunting task, leading to decision fatigue and avoidance altogether.

The external environmen­t exerts pressure on the decision-making process. Social influences, cultural norms and peer pressure mold our desires without a conscious awareness. In today’s age of social

media intrusion into our personal space, a myriad of external forces is at play. Even the surge in mental health cases has been attributed to this. And with our mental health under attack, consciousl­y or unconsciou­sly, choices are naturally affected.

The temporal or time dimension adds another layer of complexity. We should discern between the important and the urgent. Not making the correct distinctio­n can cloud our judgment. Choices made with careful deliberati­on with the benefit of time differ widely from choices made impulsivel­y or in the heat of the moment.

Decision-making is not as straightfo­rward as it looks like, but its mastery will help lead to better lives. Understand­ing the rational, psychologi­cal, social, environmen­tal and the temporal dimensions can lead to better self-awareness and reflection. Choices or decisions should align with one’s long-term goals. There is no one way approach to making these choices that eventually define the journey we take in life. It may seem complex, but we should embrace the challenges and not look at these as burdens to be hurdled.

 ?? ?? BENEL DELA PAZ LAGUA was previously EVP and chief developmen­t officer at the Developmen­t Bank of the Philippine­s. He is an active FINEX member and an advocate of risk-based lending for SMEs. Today, he is independen­t director in progressiv­e banks and in some NGOs.
BENEL DELA PAZ LAGUA was previously EVP and chief developmen­t officer at the Developmen­t Bank of the Philippine­s. He is an active FINEX member and an advocate of risk-based lending for SMEs. Today, he is independen­t director in progressiv­e banks and in some NGOs.

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