The Affect Heuristic and Organizational Decision-Making
Because I feel like it.
Learning about intrinsic vs. extrinsic motivation for the first time can be life changing. I can say that definitively because it changed mine.
For my entire life, I had been utilizing my instincts to tap other people's intrinsic motivation. But my best articulation for it was, "Like what Tom Sawyer did with the fence, except in their best interests."
But when I learned the actual articulation, "because I want to," vs. "because I have to," it was next-level empowering. It is much easier to create a plan for "because I want to," than any of that Tom Sawyer nonsense.
Yet this is simultaneously clarifying and perplexing. What does it mean to "want" something when the following statement is completely understandable? "I sure want that donut, but I sure don't want that donut."
What are the two forces at play in that conflict? One is the rational mind able to consider the consequences of eating the donut; that short-term pleasure will lead to long-term pain. The other is emotional.
Emotions are not concerned with anything other than the present, even when we are thinking about the past or future. When we are able to avoid the donut, our payoff is the emotional satisfaction of exerting our conscious choice over the prevailing influences competing for our attention.
This simple example demonstrates why emotions may be the single biggest driver of human irrationality. They are also, most people conclude, what make life worth living. And while emotions are not exclusive to humans, they are what make us quintessentially human.
Which explains why the affect heuristic, the tendency to rely on emotions over analysis in decision-making, may hold more sway over our decision-making than anything else in the human experience. It's hardly surprising, when you consider the often-adversarial nature between emotions and analysis. Nonetheless, we are wise to avoid making important decisions based on emotions.
The impact of the affect heuristic is only amplified by the dynamics that govern organizational. Not only does groupthink tend to exacerbate emotions, but the delicate balance of organizational and individual priorities creates a political dynamic with the capacity of triggering severe emotional ramifications.
Fortunately, the steps to account for the affect heuristic are relatively straightforward and simple to take. Unfortunately, people hardly ever do, no matter how hard we try to encourage it. Why, especially for high-stakes decisions?
As with all cases of systemic irrationality, the answer lies in biases, heuristics and behavioral science.
The Brain's Limitations
The human brain has enough mental energy to process only a tiny fraction of the information available to it. Were people to try to think through every decision, they would become mentally depleted, and effectively paralyzed, by breakfast.
To compensate, human beings have adopted what Daniel Kahneman calls The Dual Systems Theory. Kahneman suggests that people engage in two very different types of thinking: System 1, which is fast, easy and unconscious, and System 2, which is slow, difficult and effortful.
System 1 is like being in autopilot in sunny skies, while System 2 is like landing the plane in a storm.
By necessity, we spend the overwhelming amount of our time engaging in System 1 thinking (estimates typically reach 90% and above), reserving System 2 thinking for the relatively rare moments in the day in which we really need it.
If people are spending 90% of their time in unconscious autopilot, it begs another question: who's flying the plane? The answer to that is, "Biases and heuristics," the foundations of behavioral science.
Biases and Heuristics
Biases are mental tendencies, and heuristics are mental shortcuts that help us make decisions without expending mental energy. They fly the plane while we are in autopilot.
Fittingly, people have a bias against the word "bias," because they conflate it with racism, sexism, ageism, and all of the other isms that are worthy of our scorn.
Biases, however, are neither good nor bad. I have a positive bias for people who wear Canvas Chuck Taylor sneakers. As soon as I see them, I feel as though we have shared values and feel a kinship. It's just a mental tendency that helps me avoid spending any of my precious System 2 thinking.
Of course, bias can lead to all sorts of awful problems, especially when we perceive threats where there are none. But the answer is not to eliminate bias, because that is impossible. We could not survive without relying on biases. The challenge is learning how to recognize and mitigate the biases that our rational minds can understand are dangerous.
Heuristics face no such stigma, but play just as big a role in flying the plane in autopilot. Heuristics are mental shortcuts on which we rely when pressed to make decisions we can't "afford" to think through. The affect heuristic describes how we rely on emotions, or "our gut," to make decisions, rather than an extended thought process. Anchoring describes how we hold onto the first piece of information as our reference point in negotiations, without re-evaluating for accuracy or relevance. And the availability heuristic describes how ease of recall affects our perception of probability.
So, what is the cognitive purpose of the affect heuristic? The same as every other bias or heuristic: to save mental energy. On the plus side, it feels good.
The Emotional Purpose of The Affect Heuristic
The affect heuristic brings our conscious and unconscious desires to the front of our considerations of decisions. From that perspective, it can be seen as our champion. It encourages us to go for what we really want.
Were all of our decisions cold and calculated, there'd be no romance, no spontaneity, no humor, no heartbreak, no triumph, no aspiration, and no fun. And from that perspective, the affect heuristic is our greatest friend, ensuring that we get to experience all there is in life.
But nothing is that simple. In many cases, emotions exist specifically to get us to ignore reason. Sometimes that's good, like when a parent risks their life to save their child. But usually, it's in service to our worst impulses. We use emotion to keep going when we know we should stop. We use emotion to give in when we know we should hold out. And we use emotion to blame when we should reflect.
Because emotion cannot be considered as good or bad, decisions driven by the affect heuristic cannot be considered good or bad. The subjective value of the resulting decision is determined entirely by context. Sometimes the affect heuristic can lead us to our most heroic selves, like when we sacrifice for the good of others. Far more often, the affect heuristic can lead to our most dysfunctional selves, like when we burn bridges out of anger.
Freud described the ego as the tool we use to navigate between our own internal, potentially unconscious desires (the id) and societal expectations (the super-ego).
For our purposes, the id can be considered emotion, while the super-ego can be considered rational analysis. As with all things relevant to having a good life, the answer lies in finding balance.
The acquisition of wisdom from experience improves in-the-moment judgment. Eventually we learn to differentiate things like inconvenience honoring principle (parents risking their lives to save their kids - good affect) from things like immediate gratification with negative consequences (burning a bridge for the short-term emotional satisfaction - bad affect).
Learning to navigate our emotions is perhaps the most fundamental human challenge in life. The affect heuristic brings the consequences of that journey into our real lives though our real choices.
Common Examples and Experiences
Beyond the professional and organizational considerations, the affect heuristic greatly influences our personal and consumer decision-making.
→We may accept medical advice based on the warmth of the doctor rather than the credentials of the doctor.
→Our political evaluations are usually entirely independent of the actual policy considered, but rather entirely dependent on who proposed it.
→Parents are far more concerned about teaching their children "stranger-danger" than avoiding household accidents, even though the latter is far more common a source of tragedy.
→Our buying patterns indicate we are more concerned with feeling as though we are eating better than actually eating better. (In other words, if it says "All Natural" it "feels" healthier, so we buy it even when it isn't.)
→Advertisements that appeal to nostalgia generally outperform advertisements that highlight product attributes.
→Fear of flying continues despite the common knowledge that driving is far more dangerous.
We make investments based on charisma, make hiring decisions based on a "gut feel," love the performance of colleagues we like, and hate the performance of colleagues we don't.
It is far more difficult to identify decisions for which the affect heuristic does not play a meaningful role than the alternative.
The Affect Heuristic and Organizational Decision-Making
There is no sphere of organizational decision-making that is unaffected by the affect heuristic. It is present in everything we do, individually and collectively.
Strategic Decisions
The affect heuristic creates a multitude of predictable conflicts:
→People want to enter "cool" new markets, or add "cool stuff" to their portfolio.
→Strategic partnerships may be based on personal feelings rather than maximizing organizational benefit.
→People advocate for their own self-interests above the org more often than not, even when unconscious. (But we all know what's happening when your recommended strategy just so happens to increase your span of control.)
Operational Decisions
→We tend to advocate for our favorite routine over the best plan for the org.
→We allocate resources to people and things we like, and withhold from those we don't.
→Our choice of vendors is often determined by the likability of the sales rep.
People and Talent
The affect heuristic has more to do with performance evaluations than performance evaluations. That often keeps incompetent people in their roles and leaves talented people far below where they belong (based on merit).
Financial Decisions
→Disproportionately swayed by what people "like" and "dislike" emotionally rather than analytically, like shorting the stock of a company whose CEO you dislike.
→Brand preferences may be affected by how people view their associations to the brand.
→Our first instinct is to fight change, but especially if it hurts someone we like.
The Existing "Solutions" for Affect Heuristic
The solutions most commonly offered to combat affect heuristic are very much aligned with most biases. Maintaining awareness during decision-making, using tools and processes to counter bias and heuristics, and relying on data to do so are among them.
And these solutions, when attempted, tend to produce great results. The problem is that these solutions are so infrequently attempted.
That is understandable for a number of reasons. For starters, that degree of evaluation is far too much work given the sheer number of decisions we have to make, and we have far too little mental energy to do so.
Structured decision-making is to be reserved for our most important decisions, whether individually or organizationally.
For individuals, better decision-making requires intention and discipline, while groups require coordination and facilitation. But even those not enough to overcome the affect heuristic, because they still fail to address the most powerful obstacle of all: emotional resistance.
The New Solution for Affect Heuristic
If following a structured decision-making process might make someone's past or current decisions seem foolish, it eliminates their motivation to do it. No one wants to appear stupid, to themselves or especially to a group. If forced into a group structured decision-making exercise, they will be concerned exclusively with impression management, muddying the waters for an honest and objective evaluation.
The point must be made forcefully and effectively upfront: errors in judgment from biases and heuristics are as universal as breathing. Every single human has and will make countless of them, both consciously and unconsciously. And hindsight is always 20/20. To feel foolish for making errors in judgment is, quite literally, foolish. And it is a huge blocker to growth and improvement.
This mindset is a requirement for better decision-making, and facilitators must be skilled in making the point. But even that is not enough.
People's status and positions are often tied to certain decisions and/or supportive of the status quo. As such, they are strongly motivated to avoid or muddy any exercise that might threaten that order. This resistance must be eliminated as well. Fortunately, there's a framing to get us there.
"We're not doing this to question your decisions or threaten to your positions or status. We're doing this to supercharge your agility moving forward, which will protect your positions and status."
Stories of agility success, like Play-Doh, Frisbee and Netflix, and of agility failure, like Kodak and Blockbuster, help to drive the point home.
What makes this the "new" solution to affect heuristic is that it addresses the emotional blockers before proceeding to the cognitive exercises. Solutions are meaningless for people not motivated to use them.
The Questions to Affect Affect Heuristic
→What do you like about your preferred approach?
→Are those the right criteria on which to base your decision?
→What do you dislike about the opposite, or an opposing, approach?
→Are those the right criteria on which to base your decision?
Our ability to separate our thinking from our feeling is severely limited, which is both a blessing (gives our lives meaning) and a curse (leads to countless bad choices). The key to minimizing the latter is identifying what we like and dislike, and then evaluating whether those are the right criteria on which to base our decisions. It's simple and straightforward, but remember that the entire purpose of the emotion is to rush right past that analysis and make an impulsive decision. It might feel good for a second, but it usually feels bad for a lot longer.
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