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Decision making, emotions, and entrepreneurship. Ivey 908M58. Key questions. What’s new about emotional intelligence in our understanding of human behavior? Is EI really as “touchy-feely” as it’s been portrayed in popular media? How can you use dimensions of EI?
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Decision making, emotions, and entrepreneurship Ivey 908M58
Key questions • What’s new about emotional intelligence in our understanding of human behavior? • Is EI really as “touchy-feely” as it’s been portrayed in popular media? • How can you use dimensions of EI? • Why have some managers / individuals persisted in discounting emotional intelligence?
Emotions and feelings… • Reduce rationality • Contribute to poor decision making • Weak • Incompetent • Inappropriate
Decision making > intellect alone • Feelings play a fundamental role in the way we make decisions • Lack of emotion reduces our ability to make good decisions • People with damage in the “emotion” neighborhood of their brains tend to make inappropriate or bad decisions
Logic + feelings = good decisions Feelings help us to: • Direct our attention to highly important things • Make choices between competing options • Be flexible, maintain options, and widen our points of view • Be creative and aware of opportunities that surround us
Positive v. negative feelings • Positive feelings associated with increased creativity, integrative thinking, inductive reasoning • Negative feelings associated with greater attention to detail, detection of errors, problem solving and detailed information processing
Moods and emotions • Are expressions of feelings or “affect” • Moods are low-level, non-specific feeling that we may not even be conscious of • Emotions tend to be sharp, short-lived specific responses to specific events • Moods and emotions are differentiated by their level of energy
How moods affect our decisions • We tend to store information that is consistent with our mood • We tend to recall information that is consistent with our mood • When decision making we tend to selectively remember information that does not provide a balanced assessment of the situation
Positive = good, negative = bad, right? • Good moods increase susceptibility to decision making biases like planning fallacy, optimistic bias, greater belief in likelihood of positive outcomes, and lower likelihood of negative outcomes • Negative emotions can refocus a leader’s attention, alert us to focus on issues that we’d otherwise ignore (attention to detail)
Emotional intelligence • “The ability to effectively join emotions and reasoning, using emotions to facilitate reasoning and reasoning intelligently about emotions” • EI provides insights into organizational behavior • EI can mitigate decision making biases caused by emotions
Importance of EI • EI is twice as important as both technical skills and IQ in terms of performance • EI is more important at higher levels within an organization, accounting for 90% of difference between average and high performers • Teams with critical mass of EI significantly outperform teams without EI critical mass
The emotionally intelligent entrepreneur Self-awareness Self-regulation EI Entrepreneur Motivation Empathy Social skill
