Stress Can Lead You to Make Bad Decisions

August 31, 2017

3:50 pm

Every day, you make huge decisions that impact your life, business, or family. However, some decisions come with consequences you didn’t anticipate or desire. For founders, making decisions while stressed can lead to risky behavior, impacting the morale and culture of a company.

Research has shown that as stress levels rise, leaders tend to become more binary in their decisions, shoot from the hip and end up stressing out employees – none of which are good for the company.

Stress Impacts Taking Risks

In a stressful situation, it’s possible for the fight-or-flight instinct to take over causing individuals to take risks they wouldn’t under normal circumstances.

Research by the Association for Psychological Science indicated that men and women approach risk taking differently under high stress. Men tend to engage their fight-or-flight responses and make quick decisions without well thought out plans, where women tend to pull back and could risk engaging in analysis paralysis. Either way, these extremes don’t work in the long run.

“Stress also increases the differences in how men and women think about risk. When men are under stress, they become even more willing to take risks; when women are stressed, they get more conservative about risk,” writes Mara Mather of the University of Southern California.

Stressing Out Employees

When things start to pile up and leaders begin to feel out of control, they could either get too involved or dump everything on employees. In one extreme, leaders may feel they need to ramp up their authority and micromanage everything and everyone, which could cause disruption to their company’s work flow and overall employee happiness.

Another response behavior would be leaders forcing tasks onto employees without any direction or consideration if the employee is prepared/qualified to take on these tasks and end up abandoning them to figure it out.

Author and cofounder and managing partner at Navalent, Ron Carucci said in the Harvard Business Review, “In demanding situations leaders are forced to give people chances to step up to new challenges. [However,] the amount of authority the delegator relinquishes should match the delegatee’s skill and readiness with the situation at hand. It should begin with a clear conversation between the leader and the employee clarifying expectations, honestly assessing what the employee is ready to take on, and explaining how the leader will remain involved. Too often, a sense of urgency causes leaders to skip this important preparation. In fact, the more urgent a project is, the more carefully planned the delegated authority must be.”

Delivering Bad News in the Worst Way

There’s no good way to deliver bad news. Under stressful situations leaders may opt for the “ripping the Band-Aid off” or “soften the blow” approach – neither one turns out well for the boss or employees. Under normal circumstances leadership would take time to craft out their thoughts and have a blend of both approaches.

“Leaders must learn to blend their degree of directness and their degree of diplomacy based on the impact of what they are saying on those hearing it. Leaders who don’t have sufficient range of motion to appropriately deliver tough news have even less capacity when they need it most — dealing with the inevitable aftermath of what they’ve said. The key, again, is preparation,” Carucci said.

He suggests for leaders to set aside the fear and write out a clear message with non-judgmental language and no longer than three sentences.

“Make it about their needs, not yours,” Carucci said.

Decisions Become Too Extreme

Under stressful conditions leaders could end up simplifying everything and narrow it down to a binary solution versus evaluating all the options available to make a healthy decision.

“Unfortunately, the attempt to impose certainty on the uncertain tends to oversimplify things to a black-and-white, all-or-nothing extreme,” Carucci said.

During these moments, leaders may tend to resort back to previous paths of success that may not be relevant for new challenges.

“Reverting to extremes may create a false sense of comfort in the moment but set up disaster in the end. There are no complex challenges in the world for which there are only two possible solutions,” Carucci said.

Research authors Campbell, Whitehead and Finkelstein suggest the following to help leaders avoid impulse decisions and lower stress: Make sure to list out all the options and boundaries needed for this decision, list out the main decision makers and influencers, and engage your decision-making practices set up in the organization.

Read more about reducing stress levels at TechCo

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Tishin is a technology journalist and correspondent. She has written for TechCrunch, Demand Studios and Fitness, and has regular network segments on local Phoenix affiliate stations. She holds a Master's degree in Clinical and Sport psychology, and has covered many areas of technology ranging from 3D printing and game development to neurotech and funding for over 15 years.

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