The Why and How of Personal Decisions

Jane wants to quit her job. She worries about supporting her family if she does. Will another company pay her as well? She wonders if she will fall into another untenable position in her next job. What will friends think of her if she quits? How can she leave the team she has hired and built? Maybe she can find a better position in the same company; but will her current boss support that move or try to undermine her?

With so many conflicting emotions and facts to consider, how do any of us make personal decisions?

An article in Inquiries journal suggests the importance of the following factors in making a decision:

• Past experience
• Thinking that confirms your biases toward a specific choice (ignoring contrary information)
• Commitment to any course of action that has already cost you money, effort, and time
• A reluctance to lose that investment
• The likelihood and degree that the decision affects issues and people you care about
• The ease of the decision
• How you re-write the past: If a decision turns out to be wrong, you will try to find reasons why it was the best possible—or at least, the best you could do at that moment.

If you pay attention to those factors as you make your decisions, you may make better decisions.

Past Experience and Bias

When you base your current decisions on the results you received in the past, several influences come together. You believe:

• This situation matches the previous situation and all conditions are the same.
• The motivations that led you to the past decision are the same.
• If you made this decision in the past, it must be the right decision for you.

A dependence on past experience and bias may cause us to reject the evidence before us and continue to make bad decisions. Sometimes, for example, a leader institutes changes to a current processes or teams based on past experience rather than the benefits of the existing processes and the strengths and weaknesses of the current team. But past experience may also point us to the best possible decision during a crisis or emergency when no time exists to gather, analyze, and apply objective data.

Past Effort and Investment

When you place effort, money, time, and other resources into a decision, you become reluctant to admit that the investment was worthless and the personal decision wrong. For example, if your car breaks down repeatedly, you may continue to pour money into repairs rather than admit that the car is costing you more than it is worth. Scammers know this: they lead others to keep investing just a little more to get a big reward at the end—but big reward belongs to the scammer who disappears with all the money.

On one hand, researchers have found that people tend to value what they currently own higher than its real value because they associate the object with themselves and they see parting with it as a threat—affecting your decision to keep the car. On the other hand, a study that examined the power of fines to change people’s behavior found that even small penalties were effective over a long time in encouraging good decisions, causing you to replace your next car sooner.

Another way to measure investment is “opportunity cost,” the cost of one decision compared to another. Where does it make the most sense to invest your effort and resources? For example, you may put all your money into a college fund for your child by sacrificing a vacation year after year. Both the college fund and the vacation are good decisions. However, if you burn out because you haven’t had a vacation, the cost of the college fund increases.

TIP: Opportunity costs often appear after the decision is made. For example, during the pandemic, those who had invested previously in video conferencing and e-commerce had an edge over those who waited.

Effect and Ease

Picking up on the previous example of vacation versus college fund, you may very justifiably feel your child’s future is more important than an expensive vacation and you may find it easier to simply bank money than to plan for hotels, transportation, and meals during a vacation. The importance of other people affected by your personal decisions and the relative ease of the decisions will likely change with time and circumstances; however, they lead back to your core values.

If your decision leads you into personal conflict with your friends, family, or team, you may abandon it even if all other factors tell you to go ahead, with results that may be more positive or more negative, depending on the effect of the final decision.

Rewritten Past

Memory is a tricky thing. We search in it for past experiences and situations that will support the decision we want to make and tend to ignore or downplay anything that contradicts our decision. We also organize past experience in a way that supports our preferred self-image and therefore influences our future decisions.

“Cognitive dissonance” is the uncomfortable and even stressful feeling we get when we make a decision that contradicts our past decisions, attitudes, or our core values. To reduce the discomfort and stress, we search for reasons to support this contradictory decision; and those reasons become part of the reasoning behind future decisions.

Rewriting the past sounds self-deceptive, but it may have advantages: cognitive dissonance may lead you to rethink attitudes that have harmed yourself or others and to make better decisions in the future.

How to Make Better Personal Decisions

The previous factors are going to influence your decisions because you are human. However, the following information, which reflects research in many countries and by different groups of academics, may enable you to counteract whichever factors have a negative impact on your personal decisions.

• Increase bodily comfort improves decision making. You make better decisions when you are rested and well fed and when breathing fresh air.
• Reduce stress. Unfortunately, the circumstances that require a decision are often stressful. In that case, you may benefit from SMaRT strategies for group decision making, delegation of tasks related to the decision, advanced planning, and time and change management.
• Frame the decision in different ways. If you look solely at what the decision will cost you or others, you may reject it. If you look at what you or others gain (the value), you may accept it. In either case, you benefit from changing your perspective.
• Have a clear goal. When you know what you want a decision to accomplish, the path forward is easier to see.
• Bolster facts with creativity and gut instinct. After a certain point, accumulating more and more facts merely delays a decision rather than improving it. Once the facts are known, emotional decisions may be the best decisions.
• Look for alternatives. When your choices are limited, your decision are also limited. Sometimes the lack of alternatives is out of your control; but often alternatives exist and are merely unknown or unrecognized.
• Chose confidantes carefully. Those who will be affected most by your decision (for example, your family if you decide to quit your job) have a right to know your thought processes and may be sources of information, alternatives, and re-framing. But social pressure is also strong, especially pressure from loved ones and authority figures, and may force you into a decision you would otherwise reject. You may need objective, professional help in determining the best decision.

TIP: Your ability to make personal decisions improves with less stress, clear goals, a flexible and informed approach, and the right support.