How Time Pressure can Damage Decision Making in Business
To error is human, and there are times when simple mistakes can cause major issues. However common it may be to fault, it can also have an impact on business.
Time pressure can make even the smartest person seem incompetent. As some research suggests, people have a limited capacity for making good decisions, and a state of what is called scarcity can drain us of the limited capacity we have.
In the boardroom, this becomes extra important to pay attention to, as the governance decisions being made are impacting a large scale of business.
Handling the scarcity mindset
In a publication from Deloitte, an interesting question is asked: does scarcity make you dumb? The answer to that is no, but there are issues with the “scarcity mindset” that can be damaging to business and decision-making.
The scarcity phenomenon, when focusing on social behavior, means that humans put a value on an item based on how easily it can be lost. It occurs when someone is lacking a skill that is considered important and causes them to focus on acquiring something in the short-term which often leaves them worse off in a long-term perspective.
Shortly said, making stressed decisions can be harmful. In order to make sure that business is governed properly, it is important to make sure everyone who is concerned regarding decision making is up to date and keeping a sharp mind.
Scarcity and decision making in a digital age
With the digital transformation, stress has become a high factor at work.
Scarcity exhausts the mind. It can trick someone to believe they are staying on focus, that they have all the facts and competence needed, and making the best decision possible. In reality, this may not be true.
With digitalization, comes the necessity to stay connected most hours of the day. This can become problematic. A decision hastily made can be spread throughout and implemented in a company in no time.
HOW TO STEER AWAY FROM BAD DECISION-MAKING
A good antidote for the scarcity mindset is to create slack in the work environment. When someone is overly tired and stressed, that is when bad decision-making is more likely. To keep on track to what should be done and stay effective, there are some core rules:
- Define core missions and goals. Clarity about a bigger picture is known to give focus.
- Evaluate timing – plan to make decisions when the mental capacity is high.
- Acknowledge the need for mental rest.
- Minimize distraction and interruption by planning to go offline from emails and the internet while completing important tasks.
- Fight the tendency to be overly expectant about the big demand, and break large projects into small, step-by-step commitments.
Save time with the dilitrust governance suite
Learning how to manage time can be tricky, especially for people who have a lot on their plate such as business directors. With a digital assistant keeping track of old documents, minutes, and votes, the task becomes easier for board members. The Board Portal nodule of the DiliTrust Governance suite helps streamline tasks and improve efficiency.
For more information on how the DiliTrust Governance suite can help your board manage their time, contact our team today.