In any profession, leaders have to make decisions under increasing amounts of risk. What's important to remember is that the load of stress that we feel towards a given situation is based on a perceived level of risk. This is proportionate only to the perspective that the individual has had over their lives.
As leaders, if we want to help our team make better decisions, or we want to make the “right” decision ourselves, we need to understand that we cannot solve poor decision making by changing the problem itself, only by our relationship to the problem and ourselves.
A great example of this, no more important than any decision made in finance, or law, but nonetheless an example of the highest levels of human risk, is within combat. Military special operators are put in situations with the highest level of risk that we can encounter, a wrong decision can mean the loss of life for the decision maker, loss of life within their team, loss of their job, and the failure of missions of crucial importance to the safety of their fellow citizens. Let that one sink in for a moment. This isn’t to say that any other situation does not carry a level of risk worth noting, it just shows us a place where management of our thoughts, outcomes, and decisions, mean life or death on a large scale.
If we want to make the right decision in these high stress scenarios we also need to understand that often these decisions need to be made quickly, and thus, there is no time to deliberate over difficult situations. Our internal state needs to be controlled and our preparation must have been clear so it can offer us multiple avenues to take. Lets break this down in more detail.
A few of the basic elements of decision making with increasing levels of risk are as follows. This applies to many professions, Traders, portfolio managers, investors, healthcare executives, athletes, the list goes on.
Internal state control:
This is number one for a reason. When we plan, when we train/learn, we are operating at a baseline level of stress. In our calm state, we have a certain hormonal and neurotransmitter composition. When the stakes become greater or we are put under more pressure (time, risk, etc.), our level of stress becomes elevated, thus changing that original internal composition. This has us acting, thinking, and feeling from a completely different place. In essence, it is a different person making that decision, one that is unable to properly call upon what they learned in the preparation phase.
Our ability to be aware of the physical and psychological systems of increasing stress or perceived levels of risk is imperative to be able to make the right “decision under fire.” Areas we must target are heart rate, heart rate coherence, hormone and neurotransmitter regulation, and thought analysis and awareness.
Our relationship to fear:
It does not matter whether we are in a combat situation or we are deciding whether or not to make an investment, fear is a natural human feeling. If there is risk at any level, there will be a level of fear, even if miniscule. We can, through the state control methods mentioned above, reduce the effects of fear. But more important, is how we view our relationship with this feeling. It can be utilized as a helpful tool or a paralyzing crutch.
Fear is a future based projection, if we allow ourselves to be carried by the negative thoughts and emotions of fear, we will be brought out of the present moment, where we are currently ok and have the space to make the right decision. The other option is to allow fear to be a trigger to bring us back to the present, but we can only do this through learning awareness of our internal state. How we perform directly correlates to how we can understand ourselves when the levels of risk increase. What are our usual patterns? Are we making decisions from intellect or emotion? Are we able to trust intuition or do we allow the probability of a negative outcome to drive decision making?
Even though fear comes from a future based projection, it is inherently important to understand our past, as this is what drives fear. Without any knowledge of risk based on past experience, we would not experience fear. This topic can be explored in much further detail, we will only scratch the surface.
Recognition of triggers:
An often overused term but nonetheless informative is “triggers.” We can think of them as thoughts, actions, situations, that stir up a certain emotional state, positive or negative. One thing to recognize is that these triggers exist because of situations of the past. We often are conscious of situations of the past that affect us as things that have happened within the last couple years, or during our time at a certain profession. However, behavioral changes start incredibly early on in life. Seemingly insignificant events to us now, at one point in time were very significant. Remember that what happens to us and the effect it has is all based on perspective, and perspective is never wrong.
These events that had some effect when we were young then drive our behavior, and this snowballs as time goes on. These behaviors become part of our identity, which is often limiting. We understand that the future has limitless possibility as it is a clean slate, but we often live unconsciously to our limiting conditions.
Doing this takes introspection and analysis. Being able to see yourself from a third person point of view is a skill that can be learned, and most effectively done with and advisor as they are able to take a look at our lives without the emotional attachment to them. Being able to free ourselves from patterns that hinder decision making is a superpower consistently overlooked within the workplace.
Find the right opposition:
One of the most profound techniques utilized in special operations military decision making and strategy was the idea of having a red team. This meant someone to directly challenge decision making processes. Someone who knew the game, who knew your moves, and could poke holes in your strategies better than anyone else. This too works fabulous in business, as it is human nature often to create blinders around what they think is a great idea or a great plan. Without this separation and third person point of view of the mind, we often begin to believe all of our thoughts, and subconsciously shy away from resistance or holes in our own plan.
It does not matter how good we think we are at this, or how seasoned we may be. It just means the holes in our strategies may be smaller, harder to find, but at every level they are there. For as long as there are humans there will be a certain degree of human error. Our job is to minimize this error.
The red team strategy always takes an opposition, and we can learn to do this on our own as well. This brings confidence into decision making which further helps our cycle of state control, fear, and triggers.
Putting it all together:
All too often we live in a sink or swim environment when it comes to processes that are internal to an individual such as decision making. We see this in business, military, and sports. After utilizing processes to hone these techniques it is clear that even a small amount of training with the aforementioned processes can create large downstream return on investment. It not only helps business performance, but also in all areas of our lives.
Risk is a fluctuating external factor that does not affect the mechanics of execution, only the internal environment of the person who is executing. Our goals as high performing leaders is to reduce the effect that risk has on us, so that our judgment, energy, and clarity can serve us at our full potential.