In a recent article, I talked about the importance of making decisions out of abundance, not fear and lack. I received some great feedback from it, so I decided to do a “mini-series” on decision-making.
I started by sharing a negotiation I was part of a few years back.
Long story short, had I made a decision out of fear and lack when it came down to the wire, the deal would’ve imploded. I would’ve had to start over from scratch. Find new clients, new employees, new offices… It could’ve been one big ugly mess.
Once I stopped letting my fearful emotions guide my decisions, I closed a better deal. Jakt remained profitable, and the following years we saw an extremely rapid growth.
Over the years, I’ve continued to ask myself: how do my emotions affect my decision-making? Could I actually use my emotions to make better business decisions?
And that’s what we will discuss in this quick article.
Note: I use the word “better” intentionally. There’s no right vs wrong — they’re just decisions. The outcome might vary but, as long as you learn from them, all choices were part of your growth process.
How emotions influence our decision-making:
Emotions are normal and part of the human condition.
They help guide us through our experiences, react to the world around us and, ultimately, make better decisions within our circumstances.
Throughout my time as Jakt’s CEO, I’ve learned that emotions are not necessarily positive or negative. We all have them — yes, even you, bro.
What we can control is how they influence our decisions.
They are not supposed to be the driving force behind our choices. Instead, think of emotions as the signal for something important underneath that we need to uncover. They are there to tell us something, we have to uncover what that is.
Use them or be used. But first, you need to be self-aware enough to recognize them.
The power of self-awareness:
Admittedly, it’s taken years of conscious effort to actually learn how to process these emotions and still remain in control.
It’s been a gradual improvement –and I’m still working on it.
In my experience — and this could be a whole article in itself –, self-awareness is what allows you to remain in control of your emotions.
It’s not a black or white thing — there are many shades of grey on the self-examination spectrum. Working on it will not only have a huge impact on your decision-making, but also on you as a leader and human being.
Emotions will arise –and that’s okay.
But when they do, ask yourself:
- What are they trying to tell me?
- Am I in the mental state to make a decision now?
- Or should I wait until I’m clear-headed?
Something that has helped me make less rushed decisions is this:
Establishing Your Decision-Making Guidelines
Think of it like a set of principles or “norms” that give you structure and guide you. They’re the lighthouse of your decision-making.
For example, I am now investing in cash-flow generating businesses through the Polpo Group. When I’m pitched to partner with a certain company, I need to make a yes-or-no choice.
There’s plenty of factors that can make me lean either way. Some of them are business-related, but others are completely emotional: my mental state on that specific day, my energy, etc.
That’s why I created a group of investing principles –Commandments, if you will– that put logic over emotions. They define the type of business I will invest in, what I look for in a business partner, deal breakers, etc.
I literally have them written down on my phone. Then, when I have to make a decision, I just have to go back to my guidelines.
Keeping Your Cool Through Highs and Lows:
Have you ever looked back on a decision and thought: “why the fuck did I do that?”
And not because the results didn’t turn out so well, but because there was just no reasoning behind it?
That often happens when we let our emotions invade our decision-making. Instead of taking a step back and gaining emotional equilibrium, we are influenced by how we are feeling at that moment.
Instead of using our emotions, they are pushing us to make decisions we otherwise wouldn’t. And this can happen in both highs and lows.
Let me give you a couple of juicy stories:
I’m not Superman. I don’t run Jakt by day and save New York by night. And there’s been plenty of times over the years where I emotionally felt like utter shit.
A few years ago, I was at an all-time low.
I wasn’t sure what to do with my business –even felt like shutting down the company. My brain circled on repeat: “This is shit. This sucks. Should I just quit? Let’s close this thing down.”
But can you imagine if I moved forward with it? If I had let my emotional state get the best out of me?
The business that I grew, my team who I love, and the clients that we help… all gone.
That’s why it’s so important to make choices from an emotional equilibrium. Recognize your feelings, your behavior, and your thoughts… or you might regret it later.
It’s clear why making decisions when everything looks dark and gloomy can lead to situations that don’t fit your long-term best interests. But being hyped up is not the adequate mental state either.
At the end of the day, any emotion –both positive and negative– can skew your decision-making.
I once made a hiring decision based on feelings versus logic. Obviously, it didn’t work out.
Here’s what happened:
I was interviewing this person for a position at Jakt. They seemed perfect and I thought they’d solve a bunch of problems we had. Everything looked great, and I was ready to hire them right away. I was so excited — just couldn’t wait.
Long (embarrassing) story short: I skipped right through the hiring process (aka guidelines we had created on how we make every hire) and gave them the position shortly after.
And yeah, I quickly realized I had set up a hiring process for a reason. They ended up leaving a few months later (and I lost 10s of thousands…).
That was a very expensive lesson to learn, and I hope you keep an eye on that moving forward.
3 Quick Emotions & Business Decision Thoughts:
- Understand that your emotions do influence your decision-making, but they can be controlled and used as input. Take a step back, regain emotional equilibrium, and then decide.
- Running a business is like riding a rollercoaster. There will be highs and lows –and both of them are dangerous. Don’t make decisions when your emotional state is on a high or a low. Wait until you’re clear-headed.
- Define your guiding principles to create a structure behind your decision-making. When emotions seem to get the best out of you, they’ll be there to help you out.