Decision Making: between Emotions and Logic

We in TOC think we are people of logic, doing our best to think clearly and by that be able to draw the best decisions. Suppose it is true that we are able to think clearly – how does that impact our decisions? And does the capability to think clearly help in influencing others to take the right decisions based on our clear thinking analysis?

It is widely accepted that decisions are made based on emotions not logic.

That claim is obviously true not just because of the structure and functioning of the brain but also based on logical analyze that logic cannot make ANY decision, because what you want to achieve and what you don’t want to tolerate cannot be determined by logic.  Abstract logic does not have a goal or any wish.  Logic cannot determine how important it is to earn more money or whether to live alone or with the family or even whether to live or commit suicide.  All the above critical inputs are dictated by our emotions and all the worthy objectives are emotional.  Also every risk we have to consider involves our emotions in evaluating the damage the risk might cause us.  Measurement of ‘damage’ is done by our emotions.  So, the decision has to take into account our feelings for or against various potential outcomes.  We can logically quantify the damage; say losing $1,000, but the interpretation of the damage is done by our emotions.

So, what is the role of logic in the decision making?

First, logic looks for rational ways to accomplish the objectives set by the emotions. You like to buy a car?  Logic raises the financial impact and predicts the response of other people to your new car, but it does not tell you how much joy the enthusiastic response of others would mean to you.  Logic, of course, does not mind the esthetics of the car and the general feeling of driving such a car unless the emotions include them in the logical process.  When the car is for specific needs logical analysis could note whether the capabilities of the car are good enough for those needs.  The logic predicts some of the future problems like facing complaints from the family that the bank account is now too low, so they cannot buy what they desire.

Thus, logic is used to identify both good and negative outcomes of the decision. If one is very angry on another person, logic might raise the option to hit the other person in the face, but also warn from possible outcomes.  The judgment lies with the emotions in order make the final decision.  Would the satisfaction of hitting the other person worth more than the consequences?  This is a detailed dialogue between emotional inputs and logical analysis and predictions.

So, it is absolutely right that eventually every decision is emotional. It is also true that after the decision is made logic is used to justify it to other people.

But, logic plays an important role in the decision making itself. It is stronger for decisions that have less obvious personal impact, like many of the managerial decisions, even though we’ll discuss later some possible emotional impact also on these decisions.  When we try to impact a decision to be taken by another person we have to use very strong logic, highlighting the pros and cons and presenting them intentionally to impact the emotions of the other side.  The TOC tools for outlining cause-and-effect are great for this purpose, but the emotional effects have to be part of the cause-effect analysis.

Every decision involves a choice. We are able to respond fast to daily common decisions in an automatic way.  Inertia plays a big role in decisions that seem similar to past decisions, but logic, when used, might raise reservations from the routine model for such decisions when negative outcomes are observed.  When such reservations are raised the emotions have to respond, either by rejecting the logical arguments, or considering the impact and only then making the decision.  Rejecting logical arguments because they clash with already established models is quite common, but they also raise a certain fear that might lead to reconsideration of the logical arguments later in the future.

A person who tries to influence another has to consider the possibility of blind rejection as a possible response, which can be logically understood only when we are aware of the hidden threat of the negative emotion of being influenced. Taking into account emotions within logical analysis requires good understanding of the emotions involved.

The buy-in process, developed by Goldratt, is directed at change management. The first level of the process is to achieve a consensus on the problem. The point here is that “the problem” refers to the organization. But, the decision maker is a specific person, who also considers how “the problem” impacts his personal interests.  So, the same problem has two different settings to be judged upon.

Suppose we try to influence project managers to recognize the generic problem in managing projects. We know that most projects take longer than planned, cost more and achieve less of the planned content.  This is definitely a problem for the organization having to ensure the timing and quality of the project when the decision to go for the project is made.  Another top management need is to manage well the organization’s resources, which also suffer from late projects.

How would a typical project manager evaluate the personal aspects of project lateness? What emotions would be impacted if the performance of the next project will be similar to previous projects?  What emotions of the project manager truly mind the future wellness of the organization? Does the project manager see it as a personal failing when the performance is about the same as in the past?  Does the manager fear that her personal reputation might be harmed?

We need to recognize the fact that it is absolutely necessary to include the personal aspects of the person we are communicating within the cause-and-effect logical process.

We also need to recognize the fact that emotions are effects that cause other effects like behaviors, views, responses and decisions. The effects caused by emotions should not be viewed as irrational; much of the time they reflect perfect rationality when we understand the emotions.

There are two categories of emotions that have an impact on the role of logic for managerial decisions.

1. Positive emotions for being able to think logically. People with great passion to success have to develop one of two different, even conflicting, emotions. One is the desire to see reality objectively. This desire leads to a feeling of respect for logical analysis. The other emotion is a desire to develop a “sixth sense” that would mysteriously lead to success through taking the right gambles. The first emotion for being objective directly causes respect for logic and taking efforts to use it properly. It can be seen in most successful managers. The second type is made of people ready to take big risks and when successful they become great business people, but not much of great managers. Those people rely on their emotions much more than on logic.
2. Handling the fear from uncertainty. The emotions lead to a choice between “fight” or “flight”. Fighting uncertainty draws a person to logically analyze the odds and to systematically look for ways to reduce the damage. They respect objectivity and logical thinking. Other people hate being in fear even more than the subject matter of the fear itself. If I suspect I have cancer, I might evade doing the necessary checkups because I don’t want to know. Such people try to view reality according to what suits them.

Generally speaking FEAR is a critical source for various emotions and it has huge impact on our decisions.  Logic does not tell us to be brave or coward.  These behavioral patterns are dictated by emotions, and then logic can take the objective and look for the best way to handle it.

It is my view that FEAR is a major cause for inconsistencies in the behavior of managers.  While most managers try to do well for the sake of the organization, the potential impact on their personal emotions might lead to different decisions.  Thus, the inconsistencies are not irrational – they just reflect the role of their emotions and self-interests.  We can use LOGIC to identify the inconsistency and build the rational explanation for it.  When we fail to do so, it is usually the failure of our logic, not the irrational nature of the person we try to understand.