From pausing projects to retrenching employees, running a business amid the coronavirus pandemic is filled with tough decisions. The stakes are higher, and the pressure is on another level. Business decisions also become more complex as they need to be made fast based on limited information.
So how do you exactly decide on business matters in a time of crisis? And what can you do to improve it?
The bias of here and now
In a lot of ways, humans are creatures of the present. We tend to make decisions based on the most recent or readily available information. We tend to be responsive than proactive. That’s especially true now that we’re all battling a pandemic that reveals new details every day, prompting a constant change in protocols. But there are a reason business leaders like you stand out from the crowd—you are visionaries.
Gather current data, but don’t forget to think of your vision when making decisions for your organization. Be sure to conduct a SWOT analysis. It’s time to examine every obstacle and issue, including underlying assumptions and costs related to the matter at hand. Plus, draw out alternative scenarios. If you make staff cuts this quarter, how will you meet the expected increase in market demand next quarter? Will you hire and train employees again or outsource teams? Or is it truly a good move to pause that ongoing R&D project? Perhaps, that product being developed could help your business recoup financial losses quickly.
The impact of mood and emotions
Although we might consider ourselves rational, studies show that our mood can impact our decisions. For instance, angry people don’t usually question themselves; rather, they look for other parties to blame.
Happiness can also affect the way we make choices. Think of house-hunting. Finance experts would always suggest shopping for different home loan programs, even if you already had your eyes set on a certain property. Letting your excitement guide your home buying journey can leave you with a 30-year mortgage with high-interest rates. It would be best if you always approached life-changing decisions with rationality.
The same goes for your business. Losses, in multiple ways, can bring a high level of sadness. And sadness can lead to poor financial decisions, as it triggers an implicit goal of replacing that loss quickly. So, the first thing you have to do to make better decisions is to keep your emotions in check. This includes avoiding nonstop news coverage of the pandemic, which can stir emotions that aren’t helpful. Also, focus on things you can control. You may not have control over stay-at-home orders in your city, but you have a say on how your staff can shift to digital and continue day-to-day business operations online.
The silver lining of the pandemic is it forces everyone, including business leaders, to think about interdependencies between different jobs and between economy and health. This is a chance to foster new ways of thinking that can lead to solutions that can solve the world’s problems today and tomorrow.