Why Stress Skews Decisions

Stressed people at work.
Mar 2021

In a new discipline of brain research, Neuroeconomics – Decision Making and the Brain, MIT neuroscientists have now discovered that making decisions in risk and reward choices, known as a cost-benefit conflict, is dramatically affected by chronic stress. As it turns out, we are far likelier to choose high-risk, high-payoff options when we are stressed as opposed to low risk-low return payoffs.

What might this look like as a business owner or leader?
– Feeling desperate to replace an employee and quickly settling on someone who is not a great fit
– Deciding between two options and choosing the more risky one hoping for a payoff
– Worried about your personal finances and choosing a riskier investment
– Stressed after work and deciding on that extra drink before you drive home

In one experiment, results showed that chronic stress biases human decision-making towards habits rather than goals.   That is why it is so hard to lose weight, exercise more or kick a craving or habit.  When we are stressed, we fall back to old patterns. Rather like practicing your new golf swing on the driving range and reverting to your old swing with that shot over water.

Simply put, the goal here is not more will-power or more analysis, it is to reduce one’s stress levels so that calm, optimal decisions can be arrived at.   There are a number of tools and techniques – I highly recommend Emotional Freedom Technique (EFT tapping) but even a walk in nature or a walk around the block before an important decision can help with creating a calm clear mind that can arrive at better decisions that support higher levels of productivity and profitability.


Submit a Comment

Your email address will not be published. Required fields are marked *