Here’s scary information about decision-making. We make logical decisions illogically. In decision-making, we don’t weigh either side of an argument equally. There is some hidden force that puts its finger on the scale and tips it in one direction. Decision-makers will run from risk, faster and harder than they will run towards gain.
Proof? Don’t you believe me? Do you think you’re a logical decision maker? I say you’re risk-averse?
According to Michael Lewis’s new book,
lung cancer patients confronted with the choice of radiation therapy or surgery with a 90% survival rate, the overwhelming choice is surgery. Yet just by framing the question differently, when presented with surgery with a 10% mortality rate, patients overwhelming choose radiation therapy.
Do you understand that 90% survival is the same as 10% mortality…right?
When decision making we avoid risk or so says the new book by Michael Lewis, The Undoing Project. Lewis, the great storyteller, and author of books including Money Ball and Liar’s Poker takes a dry subject and weaves it into a story that resonates. There’s a lot of learning to be had in his books.
It’s already well established that people avoid risk more than they pursue gain in decision-making. The undoing project drives this home.
It can’t be said enough,
humans make logical decisions illogically.
Fear of loss, fear of having regrets is a much more powerful motivator than gain.
That means that instead of saying my service can get you 5 new customers per month, I should say, “I can stop the bleeding and save the five new customers you’re losing per month. Instead of saying I can get you $100K additional revenue per month, try “you’re losing $100K every month you delay.”
Michael Lewis’s undoing project is a must-read for people who run businesses, for people who need to influence decision-makers, and for humans. If you fall into one of those three categories, pick it up.
The book is based on the collaboration of two brilliant psychologists Daniel Kahneman and Amos Tversky, who dedicated their lives to the foibles of human decision-making. In fact, another must-read you might want to check out is Daniel Kahneman’s, Thinking Fast and Slow.
Want To Improve Your Decision Making?
Now I have to tell you that there are other tricks and tips I can share with you that will plug any leaks in your business. For instance, if you’re not emphasizing loss statements over gain statements you’re probably losing at least 5 new customers per month. I can coach you on how to save them. Reading the undoing project may convince you that you need an unbiased accountability partner to help you make rational decisions rationally instead of logical decisions illogically.
Partner with a coach to ensure the best outcomes. Schedule a complimentary coaching session with me and let’s work together to make better decisions.