How Do Different Mental States Affect Your Business Decision-Making Skills?

Sometimes the most important thing that you can do to achieve business success is making the right decisions at the right moments. But have you ever considered that your mental state could mean that you make different decisions simply because of how you feel?

Decision-making in business must be put into neutral territory. Why? Consider how our emotional state impacts business decisions:

• How confidence and overconfidence can affect you
• Where sobriety and altered states might make a difference
• How your own confirmation bias changes your ability to think clearly

Where Depression Fits In

When you try to handle depression on your own with limited resources, you can end up in a very dark place. In that dark place can negatively affect your ability to run your business properly.

If things in your life just don’t seem right, you may try to overcompensate in the business world, or you may even just surround yourself with people taking advantage of you. Ensuring that you step outside of your depression to make financial decisions is explicitly vital.

Confidence and Overconfidence

There are lots of benefits to confidence in business. However, end up approaching a topic with too much confidence or a sense of pride that isn’t necessarily true. You can make extremely detrimental decisions with immediate and long-standing financial consequences.

You must always understand what you’re trying to do from a broad perspective, and there is a certain humility that comes with that type of focus. Lose your humility and grace, and your decisions can lead to spectacular falls.

Sobriety and Altered States

There is a lot of history where people gathered in back rooms with cigars and whiskey have made significant business decisions. Though that may seem romantic, making decisions when your inhibitions are limited can lead to many bad things. There’s nothing wrong with having a drink with dinner and discussing matters, but getting drunk and making decisions that affect not only your life but also others if you have employees, is something that you should avoid.

Understanding Confirmation Bias

Everyone has their own confirmation biases that they deal with on a daily basis. The problem with this is when you start making business decisions because you believe opinions to be fact and can’t figure out how to look beyond your narrow perspective into an area that might be more critical.

You can see millions of examples of confirmation bias in discussions that people have every day. But discussions are one thing, and business decisions are another. Don’t let yourself fall into that trap.

Summing Up

We can never remove our biases from decision-making as to do so would not be human. Maybe this is why robots will become leaders! But that is a topic for another time.

As leaders, we can get better outcomes when our decision-making is not impaired by our mental state or condition. The starting point to improvement is conscious awareness and changing our behavior. For the continuous improvement, we need to create new habits and aim for unconscious competence – which we can do when we have the motivation to do better.