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Slow Down to Make Better Decisions in a Crisis

Using deliberative reasoning

There is a lot of information out there right now about the virus and how to react. 

Take the time to read and digest it (maybe even discussing it with an expert) before making important personal and business decisions.

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IDEA EXTRACTED FROM:

Slow Down to Make Better Decisions in a Crisis

Slow Down to Make Better Decisions in a Crisis

https://hbr.org/2020/03/slow-down-to-make-better-decisions-in-a-crisis

hbr.org

5

Key Ideas

Decision-making obstacles

Psychological reasons why we find decision-making difficult right now:
  • The realness of the present threat: the new virus is really contagious and people are dying from it around the world.
  • The amount of uncertainty about the virus: the real number of infected people, the speed of its spread, future projections.
  • We have little control over the situation. This creates anxiety. In addition, we may be doing our part, but it is hard to know which actions and programs are having an impact on creating the absence of the disease.

The pandemic and our biases

The threat, uncertainty, and anxiety related to the pandemic lead us to make short-sighted decisions:

  • we crave more information so we are spending a lot of time looking for news updates relating to the virus and its spread. But too much negative news causes stress and distraction.
  • the lack of agency causes people to seek out actions that will make them feel more in control. Early on, this took the form of buying hand sanitizer and rubbing alcohol.

Financial decisions

People want to take action quickly, even when inaction might be more prudent.
Faced with anxiety, some are making quick decisions about finances as well and started fear selling their stocks. But this is taking a paper loss in the present that is likely to come back in the future (given the way stock markets have acted in the past).

Slowing down

To make good decisions in troubled times, it's best to slow down, even if our fears urge us to take action.
Most of the actions you are likely to take will not be prudent in the face of a potential pandemic. By slowing down, you can use deliberative reasoning with data.

Using deliberative reasoning

There is a lot of information out there right now about the virus and how to react. 

Take the time to read and digest it (maybe even discussing it with an expert) before making important personal and business decisions.

SIMILAR ARTICLES & IDEAS:

Missing the signs
Missing the signs

There are many known psychological processes that cause individuals and organizations to miss the signs of a coming crisis – even when the signs are noticeable.

One reason is known as the...

Optimism bias

One possible reason for the "optimism bias" is found in the way we learn new information. People are quicker to change their beliefs when the information is better than expected, compared to information that is worse than expected.

  • If people were told that lockdown would be eased in two weeks, people would quickly update their beliefs. But if experts said it would last longer, people would be less likely to update their beliefs. They will make statements like "I don't really believe it" or "things change."
  • People may underestimate their personal risk of infection.
  • People may fail to adopt precautions like social distancing.
Outcomes bias

Outcomes bias it thinking that because things turned out reasonably good, we can underestimate how close they came to going wrong.

In the past 20 years, there have been two outbreaks of diseases caused by the new viruses. The outbreak of 2003 killed 774 people before it was contained, and the Mers outbreak in 2012 has killed 858. The new virus has far surpassed both.

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Times Of Anxiety

The virus outbreak has people stirred up in anxiety, with canceling of travel plans and events the world over. 

In this ongoing public health emergency, it is easy to overreact, as t...

Coping With Anxiety

Fear of the unknown, causing anxiety, can be helped by deep breaths or just a reminder that uncertainty is a part of life.

Practicing mindfulness (or meditation), focusing on the present moment, can relieve symptoms of anxiety.

Bad News And Social Media

Too much panic-inducing news can cause unnecessary alarm and anxiety. It is advisable to stay clear of fake news and implausible claims on social media.

At the same time, it is also important to know the essential updates, like the recommended social distancing and events being canceled.

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State Of Emergency
The ongoing pandemic is more than just a gigantic health crisis. The global economic order, for the first time in several decades, is on the path to an imminent restructuring.
Th...
Resolve

The measures to stop the spread of the virus are well-known by now: staying home in lockdown, working from home as a default option, schools switching from physical classrooms to e-learning models.

Not every country has been able to make these choices fast, due to a combination of hesitation, inaction, and paralysis. Before any decision is made, the first thing to do is determine what needs to be done and at what pace and scale.

Resilience

As the current health crisis steamrolls into an economic crisis unparalleled for the last 100 years, the decline in economic activity is already at par with the great depression.

This crisis of global proportions requires resilience, both for near-term issues like liquidity and cash flow, as well as long-term issues like uncertainty, personal financial stress and recovering from multiple challenges that were already present and are now further complicated due to the pandemic.

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2,000 decisions per waking hour

Research has shown that the typical person makes about 2,000 decisions every waking hour. Most are minor ones and we make them automatically. But many have serious consequences.

That's why...

Decision fatigue

Our ability to perform mental tasks and make decisions wears thin when it’s repeatedly used.

Identify the most important decisions you need to make, and, as often as possible, prioritize your time so that you make them when your energy levels are highest.

A steady state of distraction

Our brains process five times as much information today as in 1986. Thus, many of us live in a continuous state of distraction and struggle to focus. 

To counter this, find time each day to unplug and step back from email, social media and news.

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Every Decision In Life Becomes a Trade-Off
Every Decision In Life Becomes a Trade-Off

... and boils down to what we give up to attain something. Our mindsets are inclined towards pleasure and resistive towards pain. We normally like to think in terms of gai...

Good and Bad Decisions

Decisions are a cost-benefit analysis of risking something small for the opportunity to gain something big.

  • Good decisions can be: Exercising, meditating for 10 minutes daily, finding the courage and striking up a conversation with someone, applying for jobs that you may or may not get.
  • Bad decisions can be: lying or pretending to someone, driving unsafely, sending angry text messages, or staying up late drinking before an important meeting or exam in the morning.
Trade-offs and Life Values

Trade-offs are not something as simple as flipping a coin. Our values guide us towards what we want in life, and it is not the same for all. Example: Buying a house has a trade-off of mortgage for the next ten or more years. This is subjective and depends on what we value in life.

Indecisive people suffer because they don’t know their inner values and what they care about.

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Benefits of self-sufficiency

The current pandemic will make many of us see the benefits of relying on locally sourced food and goods—instead of products demanding long and distant supply chains.
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Adoption of solar panels

The current pandemic hasn't had as consequence a power outage yet, but there is this risk, in certain places.
Solar panels mark the move away from a more or less centralized system supplying electricity. The benefit of decentralized systems is, simply put, that they don’t have central points of failure (and a way to do the right thing for the planet).

Adoption of drone technology

Drone have been known so far mostly for their surveillance potential.
Now that the ability to get goods without human touch is a more appealing value proposition than ever. During the pandemic however, we could use them to deliver all sorts of products (food, medicine) to the doors of any self- or forcefully quarantined person.

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Noise

Organizational noise comes in endless streams of information and communication. At the individual level, there is internal noise, which manifests from our biases, fears, and competing priorities...

Fear

Fear of failure, fear of making the wrong decision, and fear of our own inadequacy all affect the actions we take and quality of the decisions we make.

If you frequently question your ability to make sound decisions seek out a coach or mentor who can help you boost your confidence.

Attention

Multitasking slows us down as the brain is optimized to focus on one task at a time. Spreading our attention across multiple tasks becomes draining and leaves little energy for those tasks that matter most.

Pay attention to what you're doing. Turn off any distractions that may take your mind elsewhere.

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Preparing financially for the future
Preparing financially for the future

With the perspective of an economic crisis in 2020, some of us already have to rethink our spending habits to make ends meet. Others may feel more financially secure. But when recessions come, they...

How to treat your income

Whatever income you are earning right now should be treated like it’s temporary.

Treat your current income as if it might need to stretch for as long as possible. It doesn't mean you need to cut back on everything, but you might need to consider cutting some of your expenses so that you can put more money into savings.

Saving versus spending

Saving money now is worth more than spending money later. This advice applies to any budget item that you could spend less on now.

Even if it is a really great deal, remind yourself that cash in hand now is worth more than an unnecessary purchase.

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How leaders cope with uncertainty

Uncertainty is always there. The degree of uncertainty can rise and fall.

Leaders, being human, also have difficulty coping with uncertainty. When they receive confusing information, they te...

Heuristics during periods of uncertainty

During periods of heightened uncertainty, leaders reflexively reduce investment, stop hiring, slash marketing, refrain from entering new markets, or stop making decisions.

Although understandable, acting in a pro-cyclical manner can be counterproductive. It can leave companies poorly positioned to benefit from the next stage of the cycle.

Attributes to succeed in uncertainty

Organizations should be inclined toward action. As a baseline, companies must strive to be fit for growth. This can be done by aligning costs with priorities and strategy, investing in varied capabilities, and using traditional and digital levers to execute.

They must regularly engage in scenario planning with an array of options. They must build the capacity to be agile. They must learn to become more resilient to withstand strong external forces and quickly recover from setbacks.

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