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Emotions vs. Information in Business Decision-Making

Sean Peek
Sean Peek
business.com Contributing Writer
Updated Aug 11, 2022

Though our reliance on data has grown, emotion is an ever-present element in business decision-making.

In the age of big data and ever-present infographics, it’s clear that numbers and customer analytics play a bigger part in business decision-making than ever before. Today’s professional landscape has created a need for hard stats and numbers to help businesses justify where to allocate their hard-earned dollars in their business budget. 

Though our reliance on data has grown, there is an element in business decision-making that’s nearly impossible to quantify: emotion. We’ll explore the pros and cons of emotion-based versus information-based decision-making and offer tips for making better business decisions. 

Pros and cons of emotion-based decision-making

Even though many of us see ourselves as rational thinkers, emotions are prevalent drivers of workplace decisions. Emotional decision-making has its upsides and downsides.

Pros of emotion-based decisions

  • It’s easy to act on emotions. Even unconscious emotions can affect decision-making. Information overload is a constant today, but neurological processes that form feelings are unconscious by nature. People may not always be cognizant of their emotions, but they can still act on them. Emotional messaging decodes faster, influencing our decision-making abilities while combating our continually shrinking attention spans. Information alone is not enough to call people to action, but channeling emotions can affect behavior. 
  • Emotions can guide logic. Research shows that most cognitive skills take place in the parts of the brain that house emotion, primarily the amygdala. A famous study by neuroscientist Antonio Damasio even discovered that a patient with damaged emotional brain regions could reason normally, but couldn’t make decisions as simple as what to eat for lunch. Emotions guide our decisions as consumers because triggered feelings lead to a higher probability that we’ll act.
  • Emotions go beyond feelings. Brands that focus on emotions can prompt customers to open up to new ideas, take action, and build trust.
  • Emotions can drive respect for the value of life. According to Decision Innovation, emotions can greatly influence people to care about – or at least consider – other people’s lives.
  • Emotions can help us process and grasp experiences. When we process and grasp experiences, we gain a quicker decision-making turnaround time. 

FYIFYI: Intuitive decision-making can be highly effective. Business leaders like Steve Jobs and Richard Branson are known for relying on gut instinct for business decision-making.

Cons of emotion-based decisions

  • Excitement can cause us to overestimate success. Our emotions can sometimes get the best of us, especially when we’re feeling that rush of dopamine that prompts us to feel giddy. When this happens, it’s more tempting to take risks. This is why casinos are luxurious and filled with flashing lights and buzzing sounds. The psychology behind the setup is that these stimuli make people excited — and more emboldened to cast bets and spend money.
  • Many make quick decisions with no core. When we base our decisions on emotions, we sometimes make them too quickly and forget why we decided that way in the first place. As a result, we try to come up with logical explanations after the fact to justify choices that had no basis other than emotion alone.
  • Anxiety can influence our decisions. When we’re having anxious thoughts and feelings about a particular thing, we can end up feeling anxious in other areas of our lives. Because anxiety lingers, our thinking process can become muddled, making it more difficult to arrive at sound decisions.
  • Projection leads to flaws in decision-making. People grappling with their emotions may wrongly project their feelings onto others because they can’t recognize the problem within themselves. This leads to making false accusations while the root of the issue goes unresolved. 

FYIFYI: It’s essential to balance facts and emotions when making a sale to find the right approach for each prospect.

Pros and cons of information-based decision-making 

Like emotion-based decisions, fact-based decision-making has both upsides and downsides.

Pros of information-based decisions

  • Data brings transparency and accountability. When there is data, there is due diligence in properly executing a company’s policies and procedures. This lessens risks and, in turn, improves outcomes within organizations. Transparency in business encourages camaraderie and engagement among teams by helping them see the reasoning behind decisions affecting their daily tasks and occupations. Collected and evaluated data keeps an organization accountable for ensuring it’s reaching its business goals and maintaining its priorities.
  • Data drives consistency. Data makes it easier to dictate the next steps and solve problems within an organization. Employees can look at the data in front of them and draw conclusions based on systematic patterns that have driven results in the past. As more workers become involved with making data-driven decisions, consistency becomes more refined. Workers know if they’re hitting targets and satisfying their customers or if they need to make changes. 

Cons of information-based decisions

  • Data can inspire blind trust. There may be instances where numbers are incorrect. If something looks too good to be true or vastly off the marker, maintain a healthy dose of skepticism. Check for accuracy and investigate data that doesn’t look reliable. This practice will never misguide you.
  • Data can be misleading. When analyzing data, look at everything in context to avoid inaccuracies. Otherwise, you might make assumptions based on partial information. This tends to happen when workers draw single conclusions from complicated cases, unable to see the causes rising from too many variables. Use data to support your decisions; don’t base future decisions on data analytics alone.
  • The data may be low quality. In a perfect world, data is always reliable. However, in some cases low-quality data has cost companies millions of dollars. Many variables have contributed to these causes, such as data entry mistakes or errors stemming from substandard third-party tools. To prevent low-quality data, hire a data steward to locate reliable data sources and maintain quality and accountability. Decision support systems can also help with data research. 

Did you know?Did you know? A decision support system is a computer information system that gathers, categorizes, and scans data used in decision-making tasks for an organization’s management, operation, and planning procedures.

Tips for making better business decisions 

Follow these tips to use both emotions and data for the best possible business decisions. 

1. Involve multiple perspectives in your decisions.

Organizations can significantly improve their decision-making if they transition from using a singular, top-level authority to incorporate input from all company levels. When business leaders open themselves up to more ideas, opinions and accountability, they can reap better results in the end, saving time and money. Big bosses and business executives should branch out to receive customer feedback and informal employee feedback for ways to improve. 

2. Merge emotions with data.

Data can tell you a lot about your business’s status so you can make changes accordingly. But keeping emotions in mind can enhance problem-solving skills within your company. Emotions tend to dictate whether or not people will take action to try a new product or a service.

TipTip: Add emotion to your content to boost engagement, increase its memorability, and humanize your brand so customers identify with it.

3. Focus on the results.

Focus on the results you hope your company will achieve, concentrating on both short-term and long-term goals.

  • Ensure a balanced budget by tracking all your bank statements. 
  • Set an excellent leadership example so that your employees can better represent your business’s culture.
  • Always look for ways to learn and improve so your business can excel. 

4. Analyze customer needs.

Integrating technology like AI chatbots has significantly helped businesses improve their customer service. This technology assists customers more quickly while helping businesses become aware of their customers’ most specific or targeted issues before they snowball into bigger problems. Analyzing customer needs helps businesses base decisions on critical issues, saving them money in the long run.

5. Learn from your mistakes.

Learn from key business mistakes you’ve made in the past, and use those setbacks to build a bridge to your future success. If you run into problems such as a drop in sales or negative customer ratings, figure out what went wrong and use that information to improve your methods. For instance, if your company has routinely struggled with hiring for a cultural fit, change your hiring strategy. Consider investing in a recruiter or assessment tests that can significantly change the trajectory of your business.

Shayna Marks contributed to the writing and reporting in this article.

Sean Peek
Sean Peek
business.com Contributing Writer
Sean Peek has written more than 100 B2B-focused articles on various subjects including business technology, marketing and business finance. In addition to researching trends, reviewing products and writing articles that help small business owners, Sean runs a content marketing agency that creates high-quality editorial content for both B2B and B2C businesses.