Making Better Decisions

By: Karen Rulifson

Nick Tasler recently had an interview done for his book, The Impulse Factor, and I wanted to share it here. Through his years of research, he found our efforts to make better decisions aren't complete if we don't take into consideration who is making the decision. He mentions about one quarter of the population have impulsive tendencies while the rest of the population are risk managers. He then provides a clear understanding of how we make the choices we do and the tools to make better decisions. Here is his interview:

How is your book different from other books out there on improving your decision making?
There are a lot of really great books on decision making out there. Virtually all of them are focused exclusively on how certain situations are going to impact the decisions we make. Now, that’s really important information, but a key piece of the puzzle is missing if you really want to improve the way people make decisions. You must take into account the natural tendencies of the decision maker. How each of us differs—whether we are more cautious or more impulsive—is going to impact how we see a given situation, and ultimately how we make a decision in that situation. Genetics have a lot to say about which kind of decision maker you are, and so do the experiences that have shaped you over the course of your life.

How are they alike – and how are they different?
Some people simply are more impulsive than other people, and they tend to make quicker—often riskier—decisions than other people. We know from a slew of psychological research that’s been done over the past decades that the majority of people steer clear of risk whenever they can. But not everybody fits that cautious mold. A naturally more impulsive person—that includes about a quarter of the population--doesn’t make decisions the same way most people do. They see things differently. Where the cautious majority of people see situations in light of what they might lose and how to manage the risks, the more impulsive people make decisions based on what they stand to gain from that situation. Cautious people tend to be more concerned with preserving their peace of mind, where impulsive people are concerned with scoring a bigger piece of the pie.

Another key difference is that the impulsive people tend to be much hastier when making decisions. And they actually prefer it that way. Think about this: impulsive people are nearly five times more likely to prefer making decisions under time pressure than cautious people are. In fact, 72% of cautious people said that they are least comfortable making decisions under pressure-packed conditions. On the other hand, over half of impulsive people said that they are most comfortable making decisions when they are pressed for time. As you can imagine, that stark contrast in styles has a huge impact on the conditions individual people need in order to make good decisions. To get the best results, some people need enough time, and others need limited time.

Why is it important for people to know their decision making style?
It’s absolutely vital knowledge if you ever intend to become a better decision maker. If you don’t know the way you naturally tend to approach decisions, then you’re going to end up reading a lot of advice and trying a lot of strategies that simply don’t apply to you. We often hear that you need to allow yourself plenty of time to make decisions. That’s fantastic advice for cautious people, but not for impulsive people. On the other hand, we generally don’t need to tell a more cautious person to think things through or to count the costs – they do plenty of that already. Both kinds of decision maker play a crucial role, and there are strategies they can both apply to become better decision makers. But the strategies are going to be different depending on which kind of decision maker you are.

The Impulse Factor talks about a genetic difference between the two, tell me more about that.
That’s one of the most fascinating things I found when researching the book. For a long time, I had been seeing these stylistic differences between people even though most researchers were glossing over it. But only recently have scientists begun to focus a lot of attention on a certain dopamine gene. Basically, this gene affects the way some people’s brains deal with dopamine. Dopamine is a brain chemical what makes us feel excited. For example, when you’re standing at the edge of an open airplane door with a parachute on your back or getting ready to buy a risky stock, your dopamine levels jump before you do. Except about 20-25% of the population has a certain dopamine gene that mutes the response that these people have to dopamine. So, where most of us can get excited by a good book or a roll in the hay, it doesn’t cut it for these people. They are wired for more stimulation, which makes them do things that most of us wouldn’t. They end up doing a lot of things without fully considering the risks or the consequences--it makes them impulsive.

In today’s fast environment, wouldn’t it be better if we were all impulsive?
Not so fast. We can’t forget that positive developments have come hand-in-hand with some rather unpleasant side effects. The need for stimulation seems to play a big role in addiction and other social ailments that we would be better off without. Traditionally, we haven’t paid enough attention to the positive aspects of impulsivity, but we absolutely can’t deny its negative aspects. If everyone were impulsive, businesses would all function like Enron, family life as we know it would be almost non-existent and human society would probably slip into unrelenting chaos. The truth is that we need a balance of impulsive people and cautious people in virtually every family, team, company and society. In fact, we need just as many, if not more, cautious people than impulsive people.

Ahh, and what might the most cautious segment of the population learn to improve their decision making style?
First of all, they really need to understand that caution is sexy too. Without fail, every time I give a group of people the Impulse Factor test, some people are always disappointed to find out that they are more cautious. They feel impulsive people are the only ones having fun or achieving success, which is clearly not the case. Impulsive people might sound more exciting, but on the whole they are also far more dangerous—to others and to themselves. Acting on a healthy respect for risks and consequences the way more cautious people do, is a good thing. Cautious people are three times as likely to consider risks before acting and are much less prone to taking shortcuts than impulsive people. An impulsive person left to their own devices will spend more time chasing their tail than creating any kind of value for themselves, their company or their society. So, if you’re cautious take pride in the fact that you don’t usually act rashly or carelessly.

The Great Entreprenuerial Leader

by: Gina L. Kellogg, MA

As an entrepreneurial leader you are moving in what feels to be a thousand different directions. You are balancing business development, operations, employee management, your personal life and the desire to do the craft you love. You find yourself in a circle of dismay, at the same time being filled with the satisfaction of making "it happen". You wear all the hats, play all the roles and make sacrifices beyond the imagination of the mainstream. You do this because you know, in the core of your being, that what you believe is possible. You can feel, smell, see, taste and hear the reality of your dream. You are already living in the vision and image of what your hands are in the process of creating.


In coaching entrepreneurial leaders, I have found there to be a great difference between entrepreneurial leaders who "make it", and those who find themselves choosing to settle back into a life of "clocking in". Those who "make it" know what they stand for. They honor their personal values, and are an inspiration to others because they exude through every ounce of their being truth, authenticity and a genuine understanding of self. They have a vision, believe in their vision, and articulate their vision with such conviction and meaning that others gravitate to the mere image of what the entrepreneur already knows to be true. They are courageous, face their fears and view the inevitable challenges as opportunities to transform, grow and learn. Most of all, they embrace and welcome the evolution and constant change that will create a greater brilliance than even they themselves are able to imagine.