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HPR 207 | Following Your Gut

Heartrepreneur® Radio | Episode 207 | The Risks Of Following Your Gut With Dr. Gleb Tsipursky

HPR 207 | Following Your Gut

 

Following your gut is a bad idea in the modern business environment. Doing that would be like shooting yourself in the foot because our gut has not evolved for our current business environment. Many leaders are failing in their decisions by following their gut, especially in the business sector. In this episode, Disaster Avoidance Expert Dr. Gleb Tsipursky joins host Terri Levine to talk about how leaders can protect themselves from dangerous judgment errors known as cognitive biases which devastate bottom lines and bring down high-flying careers. Dr. Tsipursky explains why you need to be less confident about the quality of your decisions and consult with many more people. Don’t miss this episode to learn more about how you can make better decisions as a leader.

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The Risks Of Following Your Gut With Dr. Gleb Tsipursky

I have with me Gleb Tsipursky. He’s going to tell you how to make better leadership decisions by never going with your gut. Gleb, welcome.

Thank you so much for having me on, Sam. It’s a pleasure.

How do leaders make better decisions?

Leaders need to first learn that going to their gut is an old device, but it’s false advice. It makes me angry when I hear people give leaders the false advice that you should go with your gut because leaders end up shooting themselves in the foot. Our gut has not evolved for our current business environment. It’s about the savanna environment, for the saber-toothed tigers around the country and when we lived in small tribes of 15 to 30 people. That’s what our gut is evolved for. Going with your gut is a bad idea in the modern business environment.

Instead of going with their gut, how can leaders make better decisions? What do you recommend?

First, they need to recognize that their intuitive feelings are often going to lead them astray. Here’s what you need to remember. When you’re comfortable with a decision, when you think, “This is what I feel is the right decision.” That’s often going to lead you in the wrong direction because comfort often does not equate to rightness or trueness. Like people with depression, they feel the world is bad. People with anxiety, they feel the world is a threat. That all comes from your gut, these intuitive feelings. First, step away from those immediate feelings and then look at what tendencies you tend to engage in that are problematic.

For example, I tend to fall into the optimism bias and that’s one of the many dangerous judgment errors that leaders fall into where we tend to think the grass is greener on the other side of the hill and things are less risky than they are. If you know that you are optimistic, you need to step back from your optimism bias and be somewhat more pessimistic than you intuitively are. The key lesson and what you need to do is learn how you are individually biased. What kind of decision-making problems you have as an individual and then as an individual leader and be able to prevent those as you go forward and make wise decisions.

How do we figure out if we’re optimistically biased or pessimistically bias? I know with me, sometimes as a leader, I fall in love with my own ideas.

HPR 207 | Following Your Gut
Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters

That’s another cognitive bias where we tend to be overconfident about the quality of our ideas. Overconfidence bias is a huge one that brings a lot of leaders down. There’s extensive research showing that we all tend to be over-confident. For example, if you ask somebody who says that they’re 100% confident about something, “I’m 100% confident about this. This is right. I’ll bet the company on this. I’ll bet my career in this.” They’re going to be right about 80% of the time. One-fifth of the time, they’ll lose the company and they’ll lose their career. That’s very dangerous for leaders because leaders tend to be more overconfident than the average out there.

We need to be very careful about falling in love with our ideas and being overconfident about the quality of ideas. In this case, what you need to do is get an external perspective. Go to somebody you trust and ask that person, “What is the quality of my ideas like?” Don’t ask somebody who’s your subordinate. That’s the most interesting to ask because you’re in a power imbalance and they will most likely tell you that you have good ideas. Go to someone outside of that context. If you’re in a peer executive group, go to somebody in your peer executive. If you have a coach or consultant, go to the consultant you trust. If you have somebody who’s in your board of advisors, go to that board of advisors and ask them, “What’s the quality of this idea? Give me honest feedback here.”

You are saying that the best way to get an idea is to get external feedback on how we perform as a leader. What other pitfalls do you see leaders perform in making decisions?

One of the biggest pitfalls is planning. There’s a famous quote that a lot of people like to use. It’s about as famous as never go with your gut or as go with your gut and that’s, “Failing to plan is planning to fail.” People think, “I need to make plans. Let’s do strategic planning. Let’s do everything.” Unfortunately, research shows that that’s a bad idea. I’m coming from my expertise as a decision maker. I’ve been doing this for many years. Training, consulting and coaching on this topic. I’ve been studying this topic as a cognitive neuroscientist and behavioral economist. That’s where the research in my book comes from, Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business DisastersThe problem with planning is that we tend to plan for the best-case outcomes. That’s called the planning fallacy. It’s one of our dangerous judgment errors.

We think that everything will go according to plan or we feel at least. Our gut reactions feel that everything will go according to plan and therefore we tend to invest our resources as though everything will go according to plan. Unfortunately, what the research shows us a large majority of the time is our plans don’t survive contact with the enemy as another famous phrase goes. We end up wasting a lot of resources, having a lot more time than we need and a lot more resources than we thought that we would need. A much better phrase is failing to plan for problems is planning to fail. That’s something you should go with as opposed to go with your gut.

Let’s say, you’re in a leadership position. We have heart-based and somewhere you haven’t been before, like growing your company or growing your business. How do you know what problems you’ll receive or how do you know which problems you should plan for?

The first thing you should think about when you’re in a situation that you’re not familiar with is be very careful. Let me be very clear that some leaders who are trained themselves to make good decisions in a certain context, they can make those decisions automatically. Those are not decisions that come from their gut reactions. They come from healthy and learned mental habits. What they do essentially is they change their emotions and their heart to align with healthy decision making. When you’re checking your email, you can very quickly spot spam and delete it. When you hear a telemarketing call, you can very quickly tell who was a telemarketer and leaders may be very good at taking a look at profit and loss statements and immediately saying, “This is a problem,” or delegating tasks effectively. Those are all healthy learned behaviors.

Comfort often does not equate to rightness or trueness. Click To Tweet

When you’re in a new context, it’s very important to be humble and has the emotion of humility. Develop that emotion. Be in touch with those with emotion of humility within you and say, “I need to gather much more information than I intuitively think I need to gather.” You need to gather much more information than it intuitively seems right to you. You need to be much less confident about the quality of your decisions and consult with many more people than you think you should when you’re in a new field or in a new area, especially if it’s an important one. What you need to do is generate many more options than you intuitively feel you should. Our intuitions are going to lead us astray, especially in these new areas.

With mergers and acquisitions, that’s a very big area for leaders that they step into pretty rarely. It’s not often that you do a merger and acquisition. According to extensive research fail, 80% of mergers and acquisitions fail to create value. They destroy value because leaders are overconfident. They go into these without having any backing and significant experience in this. I was working with a company that’s a midsize manufacturer here in the Midwest and wanted to buy another midsize manufacturer. They were looking at their financials. The financials look good. They were looking at their product list. They would complement well with each other, but what they didn’t look at was the internal systems, processes and culture.

HPR 207 | Following Your Gut
Following Your Gut: No matter how logical you tend to think you are, emotions tend to drive 80% to 90% of everyone’s decision making.

 

These are incredibly important. Leaders greatly underestimate the importance of internal systems, processes and culture. When I point it out, “Look at their internal systems, processes and culture.” What they found was that the company that they were going to buy was quite hierarchical in its culture and its systems and processes reflected this hierarchical nature of the structure. Whereas the company I was working with was much more team-based, open and flat. The cultures would clash enormously if they ended up joining together if they ended up buying this company. On my advice, they eventually ended up not buying the company and it was good that they didn’t. Once they tried to look at the internal processes, they saw that they would not combine well. That’s another big problem that leaders don’t tend to think about. What are the internal aspects of the other company that you’re trying to buy in mergers and acquisitions?

The culture component is huge because so many times we’re making decisions financially. Even if you’re looking at a client, “What can that client bring me? What financial gain is this from the business?” Some of these clients, they’re a great financial gain, but they’re going to drive you nuts. They’re demanding or don’t have boundaries on time. There’s a trade-off with that culture of even an individual, not just a corporation.

It’s very important to think about what’s the trade-offs. The trade-offs here that’s driving you crazy is important because we don’t tend to think nearly enough about emotions in our decision making. Whereas emotions drive 80% to 90% of our decision making. No matter how logical you tend to think you are, emotions tend to drive 80% to 90% of everyone’s decision making. I’ll give you another example. One of the bigger dangerous judgment errors that leaders fall into is called sunken costs. Once they invest resources into a project, they’re very reluctant to cut off resources in this project. Why is that? For example, one of the clients I was working with in this financial services firm. They wanted to launch a new product. When we’re talking about this product, I ask them how much market research they’ve done. 

I’ve seen that they didn’t do nearly enough research on the product. Even though they were halfway in the process of launching it, I had them do more market research. It turned out that the market wasn’t nearly as big as they thought it would be. It would not be a profitable product for them. It would cost much more efforts and it would flop. The manager who was in charge of this project had a lot of trouble letting him go. Fortunately, I was in contact with the very top leadership of the company and I was able to persuade them that, “This manager is not doing the right thing for the company.” The manager was reluctant and pissed that he was forced to shut down this project because he invested these real efforts into the project and if the project is shut down, then he’s wrong.

It comes to culture and the ego thing again.

We need to be very careful about falling in love with our ideas. Click To Tweet

It is very much about the ego. The ego is emotion and 80% to 90% of it shapes our decision making. This is very dangerous if we don’t train our emotions to make the right decisions. If we are too attached to our decisions, if we don’t train up a love for changing our mind. This is one of the most important things that you can do as a leader. Train up very strong, positive feelings around changing your mind, cutting losses and making the best decisions going forward. It’s not an intuitive thing. It’s the way that you learned how to eat with a fork and knife. It’s very intuitive to eat with your hands. That’s very easy and simple. You’ve trained yourself up to eat with a fork and knife and you’re not going to eat fish or something like that with your hands but it’s something that you had to get a love for. You had to develop positive emotions around the fork and knife. It’s the same way you need to develop positive emotions about making the most effective decisions because otherwise, you will keep going with your gut and making terrible mistakes as a result of going with their gut.

I know a lot of people would like to be trained in making better emotional decisions. How do they find out more about you, Gleb?

What they can do is they can check out my book, Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters, which is available at bookstores everywhere from Barnes & Noble, Amazon and to your local bookstores. They can check out all of my work which is at DisasterAvoidanceExperts.com. It’s the blog, podcast, video cast and so on. They can connect with me on LinkedIn, Dr. Gleb Tsipursky. If you have any questions about anything, email me, let me know at Gleb@DisasterAvoidanceExperts.com.

We have been talking to Gleb Tsipursky. Make sure you avoid disaster with DisasterAvoidanceExperts.com. This is Sam Mak, your guest host. You can find out more about diversity and inclusion consulting at www.SpeakerAuthorMotivator.com. Join us on Facebook at #Heartrepreneurs with Terri Levine, and you can discuss more of your business ideas with a heart-based entrepreneur that are growing their business.

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About Dr. Gleb Tsipursky

HPR 207 | Following Your GutKnown as the Disaster Avoidance Expert, Dr. Gleb Tsipursky is on a mission to protect leaders from dangerous judgment errors known as cognitive biases, which devastate bottom lines and bring down high-flying careers. His expertise and passion is developing the most effective and profitable decision-making strategies, based on pragmatic business experience and cutting-edge behavioral economics and cognitive neuroscience, to empower leaders to avoid business disasters and maximize their bottom lines. You can learn more here https://disasteravoidanceexperts.com/glebtsipursky/

The bestselling author of several books, Dr. Tsipursky is best known for his national bestseller on avoiding disasters and achieving success in business and other life areas, The Truth Seeker’s Handbook: A Science-Based Guide. His next book, Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters, is forthcoming with Career Press in November 2019. It’s the first book to focus on cognitive biases in business leadership and reveal how leaders can overcome these dangerous judgment errors effectively. After that he’s publishing The Blindspots Between Us: How to Overcome Unconscious Cognitive Bias and Build Better Relationships with New Harbinger in April 2020, the first book to focus on cognitive biases in professional and personal relationships and illustrate how we can defeat these dangerous judgment errors in our relationships. See more information here https://disasteravoidanceexperts.com/author-page/

Dr. Tsipursky’s cutting-edge thought leadership was featured in over 400 articles he published and over 350 interviews he gave to popular venues that include Fast Company, CBS News, Time, Scientific American, Psychology Today, The Conversation, Business Insider, Government Executive, The Chronicle of Philanthropy, Inc. Magazine, and many others, as you can see herehttps://disasteravoidanceexperts.com/media/
Dr. Tsipursky’s expertise comes from over 20 years of consulting, coaching, speaking, and training for businesses and nonprofits. He serves as the CEO of the boutique consulting, coaching, and training firm Disaster Avoidance Experts, which uses a proprietary methodology based on groundbreaking research to help leaders and organizations maximize their bottom lines by addressing potential threats, seizing unexpected opportunities, and resolving persistent personnel problems. His clients include Aflac, Balance Employment Assistance Provider, Edison Welding Institute, Fifth Third Bank, Honda, IBM, International Coaches Federation, Ohio Hospitals Association, National Association of Women Business Owners, Sentinel Real Estate, The Society for Human Resource Management, RealManage, The Columbus Foundation, Vistage, Wells Fargo, the World Wildlife Fund, and over a hundred others who achieve outstanding client results. You can learn more about that here: https://disasteravoidanceexperts.com/about

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