Here’s an additional distinction I came across while listening to the ‘Seven Secrets of Wealth Attraction’ audio by Joseph Riggio. He was talking specifically about investment decisions, but I think it has a wider application. I may have missed some subtleties, but this is my understanding of what he was saying about making decisions:
When faced with a potential opportunity, how do you decide whether to take it? Is your first instinct to look at what could go wrong, and what you could lose (the potential downside), or at what you could gain (the potential upside)?
Most people will look at the risks first. In many cases, that’s as far as they will get. The potential risks will be enough to scare them off, without even looking at the potential benefits.
Joseph suggests that people who seem to attract wealth naturally make their decisions the opposite way. They look at the upside first – what could I gain from this if it turns out well?
(Actually, some people make their decision at that point, and say “yes” without even looking at the downside. I wouldn’t recommend this as a decision-making strategy. They will have some interesting experiences, but they may not get to have very many of them.)
The sensible thing to do is to look at the upside first, assessing what you could gain from it. Only then do you look at what could go wrong. This gives you the information you need to balance possible gains against possible risks.
Let’s also think about the role of emotion in making decisions. How we feel affects our mental filters (what we notice and pay attention to) and our mental processing (what we do with the information once it’s got through the filters).
If we think about risks first when we consider a decision, this will tend to make us more anxious and stressed. Conversely, thinking about benefits will lead to us feeling happier. Research by Alice Isen, former professor of psychology at Cornell University, suggests that when we feel happy we are more open to information, we can integrate that information more quickly, and we are less likely to jump to conclusions. For example, in this study, Isen’s team cheered up doctors by (rather charmingly) giving them a small bag of candy, and found that their diagnostic abilities improved.
So, next time you make a decision, look at the upside first. Not only will this make it more likely that you don’t overlook relevant information, it will also improve the way you process that information as you decide.
© 2009, Andy Smith. All rights reserved.
Nice! Think the banks could do with some candy when considering lending at the moment!