NOT long ago, the starting assumption of any economic theory was that humans are

rational actors who maximise their utility. Economists summarily dismissed anyone
insisting otherwise. But over the past few decades, behavioural economists like
Richard Thaler have progressively chipped away at this notion. They combine
economics with insights from psychology to show how heavily economic decisions are
influenced by cognitive biases.

Richard Thaler is a pioneer in the field of behavioral economics, which studies the
intersection of psychology and economicsfueled by the insight that human beings
do not behave in a perfectly rational manner. Among other things, he has studied the
endowment effect, the idea that people more highly value an item if they own it; how
concerns about fairness can restrain firms otherwise-rational price- and wage-setting
behavior; and how public policy can influence people to behave in better, healthier
ways by way of nudges instead of bans, mandates or other forms of legal coercion.
He has incorporated psychologically realistic assumptions into analyses of economic
decision-making. By exploring the consequences of limited rationality, social
preferences, and lack of self-control, he has shown how these human traits
systematically affect individual decisions as well as market outcomes.

Behavioural economics incorporates the study of psychology into the analysis of the
decision-making behind an economic outcome, such as the factors leading up to a
consumer buying one product instead of another. Unlike the field of classical
economics, where decision-making is entirely based on cold-headed logic,
behavioural economics allows for irrational behaviour and attempts to understand why
this might be the case. The concept can be applied in miniature to individual situations,
or more broadly to encompass the wider actions of a society or trends in financial
markets. Brexit is one example of how behavioural economics can be useful. Thaler
has suggested that the theory can help explain how the narrow vote to leave the EU
was influenced by gut choices, as opposed to rational decision-making.

The theory is particularly useful for companies and marketers looking to increase sales
by encouraging changes in behaviour by consumers. It can also be used for
the purposes of setting public policy.

Thaler is particularly well known for his work on nudge theory, a term he coined to
help explain how small interventions in the environment, or incentives, can encourage
individuals to make different decisions. Nudges can, however, be manipulative, to the
detriment of individuals.

Neuroscience suggests that addressing the decision-making process itself is key to breaking
bad habits and addiction. Understanding the neuroscience behind making a decision
can be helpful when targeting new behaviors and changing bad habits. When you
reach a fork in the road and need to make the right decision for your long-
term health and well-being, using the brain science behind decision-making is a useful
tool. Hopefully, having a better understanding of the neuroscience behind decision-
making will help you make decisions that lead to positive outcomes in the future
and avoid self-destructive choices fueled by substance abuse, if you're an addict.

Decision-making is in the locus of your control. You have the power to break patterns
of behavior simply by making better decisions. You can change your mind and your
actions at any time. Even when you're stuck in a cycle of rut-like thinking and behavior,
a change of attitude and decision-making can turn your life around.
Is Addiction a Pathology of Poor Decision-Making?

There is a growing contingent of researchers who believe that addiction is a pathology

of poor decision-making caused by abnormal interactions between various brain
regions responsible for making decisions based on potential outcomes. Philip K. Dick
once said, "Drug misuse is not a disease, it is a decision, like the decision to step in
front of a moving car. You would call that not a disease but an error of judgement."
The latest neuroscientific findings on addiction show that faulty brain connections
related to decision-making can lead to addictive behaviors and relapse.

Alain Dagher, PhD, from McGill University, is leading a charge to shift the focus on cravings and
addiction towards abnormalities in the decision-making regions of the brain.
Dagher's research shows that craving a drug such as nicotine can literally be illuminated using
functional Magnetic Resonance Imaging (fMRI). When the brain is determining the value and cost of
specific actions, the perceived value of smoking a cigarette activates the brain areas used for decision-
making in people who are addicted to nicotine.
In particular, a brain region called the dorsolateral prefrontal cortex was found to regulate cigarette
craving in response to smoking cues. The degree of nicotine cravings and addiction was reflected by the
intensity of the brain imaging response. The fMRI results succesfully predicted subsequent addictive
behavior and smoking habits. Dagher's findings suggest that addiction may result from aberrant
connections between the dorsolateral prefrontal cortex and other brain regions in individuals who are
more susceptible to compulsive or addictive behavior.
The Striatum Is a Decision-Making Hub
A February 2015 study, from the Okinawa Institute of Science and Technology (OIST) Graduate
University in Japan, found that a key part of the brain involved in decision-making, called the striatum,
appears to operate hierarchically within its three different sub-regions.
The striatum is part of the basal ganglia, which makes up the inner core of the brain and processes
both decision-making and subsequent actions. Neuroscientists divide the striatum into three regions: 1.
Ventral (VS) 2. Dorsomedial (DMS) and 3. Dorsolateral (DLS). Each region plays a distinctive
role in: 1. Motivation 2. Adaptive Decisions and 3. Routine Actions, respectively.
The findings of this study, "Distinct Neural Representation in the Dorsolateral, Dorsomedial, and
Ventral Parts of the Striatum during Fixed- and Free-Choice Tasks," were published in the Journal of
Neuroscience.
In an unexpected twist, the researchers at OIST found the three parts of the striatum work together in a
coordinated hierarchy. Although the three different regions in the striatum have distinct roles, they
ultimately harmonize and work together in different phases of decision-making.
In an animal experiment, the ventral striatum (VS) was most active at the beginning of a decision-
making process. The dorsomedial striatum (DMS) changed firing levels next, as the expected reward
or consequence by making the decision to turn left or right in a maze was considered. Lastly, the
dorsolateral striatum (DLS) fired short bursts at varying times throughout the task, suggesting it is
gearing up the motor movements required once a decision is made and action is taken.
The findings suggest that the rats in the experiment analyzed the potential benefit of choosing the left
or right turn during the DMS phase. This analysis was constantly updated after each trial run. To the
researchers' surprise, there was little difference in DMS and DLS firing during fixed or free-choice tasks
in this study. These animal studies offer clues for the windows of opportunity humans have for better
decison-making.
The Prefrontal Cortex Shows Activation During All Decision-Making
In 2014, researchers in Switzerland discovered that the prefrontal cortex not only shows increased
activity during decisions requiring self-control, but during all decision-making processes. Sarah
 Rudorf and Todd Hare of the Department of Economics of the University of Zurich were able to
identify specific regions of the prefrontal cortex that are most active in the process of making a decision.
The study, Interactions between Dorsolateral and Ventromedial Prefrontal Cortex Underlie Context-
Dependent Stimulus Valuation in Goal-Directed Choice," was published in the Journal of
Neuroscience.
Previous studies have shown that a specific network in the brain is active when a person has to decide
between various choices in different situations. This research emphasizes the importance of
the interaction between neurons in two different brain areas within the prefrontal cortex.
The results of this study indicate that the neuronal interactions between
the dorsolateral and ventromedial prefrontal cortex not only play a central role when a person needs
to decide between several options during goal-directed behavior, but are also active during flexible
decision-making.
These findings refute a previous belief that activation of the prefrontal cortex only occurs when self-
control is required during decision-making between conflicting preferences. In a press release, lead
author Sarah Rudorf explained,
Decisions that require self-control are extremely important, as they directly affect a person's bodily,
social, or financial welfare. The determination of the mechanisms in the brain that are not only involved
in decisions requiring self-control but that are also used in general decisions could open new points of
interaction for therapies.
The findings of this research could help develop interventions that support certain decision-
making skills in difficult situations that depend on self-control, such as, substance abuse.
Conclusion: Mindfulness Can Help You Avoid Self-Destructive Decision-Making
A 2013 study found that 15-minutes of mindfulness meditation can help people make smarter
choices. The findings from the Wharton School of business where published in the
journal Psychological Science.
A series of studies led by Andrew Hafenbrack found that mindfulness helped counteract deep-rooted
tendencies and lead to better decision-making. The researchers found that a brief period of
mindfulness allowed people to make more rational decisions by considering the information available
in the present moment, which led to more positive outcomes in the future.
The next time that you need to make a decision, take a few deep breaths and think about the the pros
and cons of your next move in a pragmatic and mindful way. Then, do the right thing for your well-
being.
Using mindfulness could give various regions of your striatum and prefrontal cortex time to relay the
true "neuroeconomic" costs of a decision and help you make smarter choices. Mindful decision-making
can derail compulsive or addictive patterns of behavior and take you down a path that's in your best
interest for long-term health, happiness, and overall well-being.

The Myth Of Rational Decision-Making

According to researchers, emotions rule our decision-making so strongly that cloudy days can affect
stock market performance. If youve ever felt your emotions strongly triggered while trying to make
an important decision, you know how powerful they can be, often clouding our judgment and leading
us to choices that mismatch with what we actually want.
Nobel laureate Herbert Simon perhaps said it best when he wrote, "In order to have anything
like a complete theory of human rationality, we have to understand what role emotion plays in it,"
in his 1983 book Reason In Human Affairs. Simon played a crucial role in contemporary sciences
attention to emotions and decision-making and, as a result, weve seen research in this area rise
significantly in recent years.
 But just how much do emotions affect our choices? According to researchers, it's scary how
much they do.
Based on the assumption that sunshine makes us happier, researchers looked at how sunlight can
affect moods on a macro level in one study and found a positive correlation between the amount of
sunshine recorded and the stock market performance on those days across 26 countries. Unhappy
moods, like the one you feel after your countrys soccer team is eliminated from the World Cup, led
to a decline in stock market returns, according to another study several years later.
Unhappy moods, cloudy days, and World Cup losses all led to a decline in stock market returns.
IRRELEVANT FACTORS WITH SIGNIFICANT IMPACT
Francesca Gino, a professor at Harvard Business School, conducts research on emotion, focusing
specifically on how simple, seemingly irrelevant, factors can have a significant impact on the choices
we make every day.
"What we find across various different studies is that our emotions can cloud our judgment in
two main ways," she says. "One is that they make it difficult for us to judge whether advice is good
or bad. And then two, depending on the emotion we might be feeling, we might completely shut
down and not listen to advice at all. Or actually rely on the advice too much."
Gino, author of the book Sidetracked, explains that if someone feels anger, even if that feeling is
completely unrelated to the decision they have to make at hand, that person might discount the
information provided by others and focus solely on their own opinions. Or, if someone is feeling
anxious, they might be unable to judge the quality of advice they receive, relying on the advice too
much, because they dont feel confident that they can come to a good decision on their own.
Case in point is Gino's study where she and her co-author Maurice Schweitzer of the Wharton
School found that the emotion people felt after watching a short movie clip affected whether they
took into account advice they are given. In the study, participants were asked to guess a persons
weight based on a picture of the person. Everyone would be paid depending on the accuracy of their
guess. Then, some participants were asked to watch a National Geographic clip about fish in the
Great Barrier Reef while others were asked to watch a clip from the movie My Bodyguard that
showed a young man being bullied.
Afterward, all participants were given another participants weight guess and asked if they
wanted to revise their initial estimate now that new information has emerged. The findings showed
that 74% of participants who watched My Bodyguardand felt sadness for the young man
disregarded the information they were given, relying on their initial guess, while only 32% of
participants who watched National Geographic disregarded the new information, which in turn, led
to greater accuracy and pay.
Another study, led by Richard Larrick from Duke University, from 2011 found that aggression
increases in hot temperatures. After analyzing data from 57,293 Major League Baseball games, he
found that the probability of a batter being hit by the opposing teams pitcher increases with a spike
in temperature.
Now that we know emotionseven simple ones like the irritation one feels in a traffic jam
make it difficult to analyze information properly, what should we do about it? Below, Gino offers
tips to consider:
Delay decisions
If possible, give yourself time to make decisions since research shows that emotions are short-
lived and humans typically go back to "baseline states" after some time.
The significance of this "cooling off period" is shown in the example of Korea, where after the
country introduced a six-month period between the time you file for divorce and the start of proceedings,
they experienced reduced divorce rates. Its also the reason why 21 U.S. states require couples to
wait up to six days after receiving their marriage certificate to actually get married.
Increase awareness and question-asking
 The more cognitively aware you are in a specific moment that emotions are affecting your
decisions, the better off youll be. Gino suggests taking your "emotional temperature" in those
moments.
"No matter how emotional you are as a person, we should be able to understand whether we are
in the right mindset to make certain decisions," she says. "Sometimes, this is difficult to realize so
the solution is to find people who are close to us who are going to be able to point out to us that were
really not in the right state to come to good decisions."
She adds: "In a very honest way, ask yourself questions and really understand whether youre in
the right emotional state to make a decision. If you had a fight with a spouse or feel particularly
stressed out at work, maybe thats not the right time to make an important decision, so I would delay
the decision to another point in time."
It also helps to downplay the events that lead up to your emotions. For example, if youre feeling
angry after being stuck in a traffic jam for hours, remind yourself: "Its just traffic." This reduces
negative feelings and affects the physiological and neural responses youll have to those events.
Decision Making: Emotional vs Logical
Head Vs. Heart: How Emotions Affect Logical Decisions
An experiment by University of Texas researchers Raghunathan and Huang went something
like this: Subjects were shown a picture of a nice, plump chicken and a picture of a chicken that was
sickly and skinny. They were told that the plump chicken was natural and the skinny one was
genetically modified.
To the first group, the researchers explained that the plump chicken wasnt as tasty, but it was
healthier than the skinny one. The second group was told that the plump chicken was tastier, but
the skinny one was healthier.
The results? When asked which chicken theyd rather eat, both groups chose the plump one.
The first group explained their actions by saying that health was more important than taste, but the
second explained their choice by saying that taste was more important than health.
Both groups were wrong. They made the choice they did because they formed an emotional
connection with the plump chicken from the beginning of the experiment. Not only did it look better,
but they were told it was all-natural. Their logic for choosing that chicken came after the fact and
molded to fit their emotional motivations.
While humans should make logical choices, they largely base what they know and decide on
their emotions, memories, opinions, and life experiences. Its something to take into consideration
during the marketing strategy process: How can brands combine logic and emotions to create a
positive buying outcome?
Getting Emotional About Emotions
It can be frustrating to take emotions into consideration for business and marketing decisions.
If you have the best product for the best price, consumers should buy it, right? But while they can
be frustrating, emotions can actually act as a powerful ally in steering consumers to the decision
you want. To be frank, without emotion, humans would be fairly incapable of making any decision;
let alone a logical one.
Emotions are essentially shortcuts (menyre e shpejte, rruge qe I bie shkurt) built by the brain
to generate feelings on subjects, which then guide decisions and actions. If you didnt have an
emotional response to decisions, every one that you had to makebe it mundane or profoundwould
have to be distilled to pros and cons, purchase prices, and reviews. And, since you dont really have
the time to draw up a list while standing in the aisle (a passage between rows of seats in a building
such as a church or theater, an airplane, or a train) of a grocery store, you allow your emotions to
take over and guide the process.
Emotions are typically the first stop in the decision-making process, but they arent the last stop.
Logic comes in when rationalizing the decision that you want to make: You reach for the same brand
of paper towel as your mom used to buy, for instance, but rationalize the decision because that
brand of paper towel works well.
For further tangential discussion on this topic, read about what maxdiff is, and how marketers
can learn from it.( The MaxDiff is a long-established academic mathematical theory with very
specific assumptions about how people make choices: [1] it assumes that respondents evaluate all
possible pairs of items within the displayed set and choose the pair that reflects the maximum
difference in preference or importance. MaxDiff is an approach for obtaining preference/importance
scores for multiple items (brand preferences, brand images, product features, advertising claims,
etc.)
Occasionally, logic can outweigh emotions for larger decisions: Youd love to buy a
supercharged motorcycle because youve loved them since you were a kid, but it makes more sense
to buy a sedan as a commuter car. Logic wins out.
Together, emotions and logic pair to become a decision-making powerhouse. To capture both
in consumers, brands must first create an emotional connection between consumer and product
(Just like mom used to make!) before then highlighting the logical reasons to make that decision
(Now with all-natural ingredients!). This is an integral part of product research and development.
Emotions might be unpredictable, personal, and frustrating, but theyre more powerful than any
logical explanation for a decision and as such, must be taken into consideration when strategizing.
We make all our decisions based on feelings
How did you make your last decision at work? Maybe you decided on a new stationery supplier, or chose
one out of five applicants for a job. Perhaps the decision was to allocate a budget to a particular venture inside
your business, or it might have been to avoid Reggies little social down the pub this evening (what a bore
that man is!).
Then again you might have decided to work late tonight to finish that proposal, or perhaps your last
decision was to put a tenner into the charity collection, instead of your usual fiver.
Whatever it was, one thing is certain: it was one of many decisions you made today. In business, we all
make dozenshundreds, perhapsof decisions every day. This article is not about how to make better
decisions. Well, in a way it is, but I am not proposing to discuss decision making processes here.
Today, I emailed a client asking him what his decision making process was going to be at the interviews
he will be holding on Friday. Its an important process for him: he has two members of staff and is seeking
two more. His reply was perfect: I did an entire thesis on decision making at A level and came to conclusion
that if it feels right then it probably is, [so I used] feeling.
Im not saying that we only use feelings, but I do argue that how we feel about the choices we have to
make will be the ultimate determinant of our selection.

In 1928, Carl Jung identified that each person receives and processes information in four ways: thinking,
feeling, knowing and sensing. Each of us favors one of the modes above the others but we all use all four. I
am using these words with a slightly specialised definition, so here is my illustration of them.
In the processing that goes towards decision making, thinkers use data: facts and figures; they analyze
and deduce. Feelers consider their emotions, and there is a sense of feeling their way. Knowers are the
intuitive ones: they may not actually know how they made the decision, but they are sure its right (incidentally
this certainty of being right doesnt actually make them more right than anyone else!). And sensors will use
the input from their senses to inform them. (Incidentally, this work by Jung forms the basis of the Myers-
Briggs (and many other) personality metrics so, unlike most advances in theoretical psychology, this one has
been tried and tested millions of times.)
Notice I said in the processing that goes towards decision making a couple of paras back. In other words,
we harness our favoured mode when analysing the data, but we use feelings to make the decision.
 In the early 2000s, Antnio Damsio made a groundbreaking discovery. He studied people with damage
to their amygdalae, that is parts of the brain where emotions are generated. He found that they seemed normal,
except that they were not able to feel emotions. But they all had something peculiar in common: they couldnt
make decisions. They could describe what they should be doing in logical terms, yet they found it very difficult
to make even simple decisions, such as what to eat. Many decisions have pros and cons on both sidesshall
I have the chicken or the turkey? With no rational way to decide, these test subjects were unable to arrive at a
decision.
So at the point of decision, emotions are very important for choosing. In fact even with what we believe
are logical decisions, the very point of choice is arguably always based on emotion.

We have experienced the world since we were in the womb. Our minds are capable of making
connections and extrapolating at various levels, from the primitive to the postgraduate, and we tend to form
beliefs about how the world is, based on our experiences.
This is an essential process because we can use our catalogue of experiences to predict the likely outcome
of a current situation based on our beliefs without having to reprocess everything from scratch. Very important
if youve just heard the roar of a sabre toothed tiger near at hand.
Our beliefs generate feelings: the belief that the roar of the tiger presages attack immediately creates a set
of feelings around fear and so on. And so, naturally the behaviour comes: we run like hell. Note that, in this
chain experience-belief-feeling-behaviour, there is no room for logical deduction.
Our feelings and instincts to behave (ie take decisions) are found in earlier, more primitive parts of the
brain than the higher rational functions which developed after these processes has developed.
So, if you will accept that we make decisions based on our feelings (whatever other modes we may have
used in the preparatory work), the question arises: what tools do we have to help us make these decisions?

We have plenty of tools for the thinking bit: computers, databases, algorithms, calculators, newspapers,
magazines, books, our own and other peoples notes, research, televisionin fact, a brainstorming session
with half a dozen people will yield over forty different thinkers tools. How many tools are there to aid the
feeling bit?
Its probable youve not encountered any.
Emotional intelligence is not the most beautiful, accurate or even appealing phrase (one businessman told
me recently that, if I sent him any emails with the word emotional in the title, he would delete them without
opening!). Nevertheless, it seems to be the phrase that people recognise, so I will use it.
Emotional intelligence offers a set of tools around feelings which enable people to take better decisions.
Because it deals with feelings, it annoys the hell out of thinkers and knowershence the observation of my
contact above. Of course, being annoyed is a feeling, but let that pass.
Emotional intelligence has many other applications in business of which, the whole process that leads up
to the decision is one of the most important. Basically, it addresses how people work and how people work
together. If youve insight into all of that, you have real power, and a real reason to believe youre making the
right decisions.
=======
Your emotions will drive the decisions you make today, and your success may depend upon
your ability to understand and interpret them. When an emotion is triggered in your brain, your
nervous systems responds by creating feelings in your body (what many people refer to as a "gut
feeling") and certain thoughts in your mind. A great deal of your decisions are informed by your
emotional responses because that is what emotions are designed to do: to appraise and
summarize an experience and inform your actions. But if an emotion is triggered, just how much
should you pay attention to your visceral response and the thoughts it creates?
Emotions are not particularly sophisticated or precise, but their speed and utility make up for
what they lack in sophistication and precision. Emotions, when they are not disordered, provide
information about your circumstances in a simple, quick way that does not involve a lot
of cognition (thinking about it). So they attempt to tell you if a situation is optimal or not aligned with
your goal, and how you might approach it. For example, imagine that you are negotiating a contract
and begin to get anxious. If something doesn't feel right it is your emotional system that is informing
you to further evaluate the situation. You can be disrupted by your anxiety or you can take a look at
it: Does the other person remind your emotional brain of someone in the past who took advantage
of you? Is this person doing the same thing or is it just a particular mannerism he has that triggered
your anxious response? Is your anxious response a reaction to the other person or to yourself, such
as your fear of success or failure? Similarly, you may have a reaction to a "pushy" salesperson--
often an angry, disgusted, or anxious emotional response--because your emotions are informing
you to protect yourself.
You may think that the best course of action is to suppress or ignore an intense emotion rather
than figure it out. But why ignore an emotion that has evolved over thousands of years? Emotions
serve a purpose, informing you, the operator of your body, what to do. We're constantly faced with
an abundance of information that we must process--a lot of stimulation to reflect upon. You do not
have time to process all information in a reflective fashion but your brain processes it passively and
unconsciously. If your brain comes across something it appraises as a "red flag," you'll be sent a
general, vague alert in the form of the feelings and thoughts that are created by an emotion. This
somewhat imprecise signal alerts you to pay attention. In this way, your emotions serve as a cueing
system--an attention directing system associated with physiological changes that can prepare you
to take action. But it is also not a very smart system because it has many false alarms. There are
emotional misfires. Thus you need to evaluate your response to see if it is appropriate.
Emotions are behind many complex dynamics in business and personal relationships.
For example, a personal or professional relationship with someone who has narcissistic
personality characteristics can trigger a consuming emotional response in you. People
with narcissistic personalities have a unique ability to disown unwanted aspects of themselves and
evoke emotional responses in a partner or subordinate that lead the other to "own" those warded-
off aspects; including shame, guilt, insecurity, abandonment fear, jealousy, envy, anger, and even
rage. A narcissistic sales manager who wants to disown his self-doubt and insecurity might
intimidate his sales staff. Or a person who fears abandonment by a partner and wants to secure her
ties to him might provoke him to be jealous. Involvement with a narcissist becomes a roller coaster
of emotional triggers that makes it difficult to decipher who owns the emotion, and it is even possible
to become ill or stressed by the emotion you experience. The flood of feelings and thoughts that
preoccupy the recipient of a narcissist's intense emotions is itself an emotional "red alert," although
one might instead be led to believe that it's about maintaining a tie with a partner or an issue
concerning job performance.
Emotions have tremendous action potential. Yet the drive that emotions provide, particularly in
the workplace, is sometimes experienced as stress related to task completion, time management,
or productivity, rather than potential for decisive action. Consider, for example, how people respond
differently in their approach to completing a project. For some people, a project will trigger anxiety
until it is completed. But for others, that same project will not trigger anxiety until the deadline for
completion is near; that is, the deadline creates anxiety that serves to motivate action. For this latter
group a deadline is necessary to trigger the anxiety that fuels action. An
emotionally intelligent manager would recognize that deadlines have the potential to motivate their
direct reports in different ways. Thus, whether an employee completes a task early on (because
getting rid of task anxiety motivates them) or at the deadline (because deadline anxiety motivates
them), is less important than evaluating outcome. Recognizing how emotions affect your own
motivational style can help you more consciously make decisions and pursue your goals.
 DECISION-MAKING

According to Moran Cerf, a neuroscientist at Northwestern University who

has been studying decision-making for over a decade, the surest way to
maximize happiness has nothing to do with experiences, material goods, or
personal philosophy. It's all about who you decide to spend time with. But
"it's not just advice to choose your friends carefully," Cerf told Business
Insider. There are two premises that lead Cerf to believe personal company
is the most important factor for long-term satisfaction.

The first is that decision-making is tiring. A great deal of research has

found that humans have a limited amount of mental energy to devote to
making choices. Picking our clothes, where to eat, what to eat when we get
there, what music to listen to, whether it should actually be a podcast, and
what to do in our free time all demand our brains to exert that energy on a
daily basis.

The second premise is that humans falsely believe they are in full
control of their happiness by making those choices. So long as we make
the right choices, the thinking goes, we'll put ourselves on a path toward life
satisfaction. Cerf rejects that idea. The truth is, decision-making is fraught
with biases that cloud our judgment. People misremember bad experiences
as good, and vice versa; they let their emotions turn a rational choice into an
irrational one; and they use social cues, even subconsciously, to make
choices they'd otherwise avoid.

But as Cerf tells his students, that last factor can be harnessed for good. His
neuroscience research has found that when two people are in each other's
company, their brain waves will begin to look nearly identical. One study of
moviegoers, for instance, found the most engaging trailers all produced
similar patterns in people's brains.

"The more we study engagement, we see time and again that just being next
to certain people actually aligns your brain with them," based on their
mannerisms, the smell of the room, the noise level, and many other factors,
Cerf said. "This means the people you hang out with actually have an impact
on your engagement with reality beyond what you can explain. And one of
the effects is you become alike."

It's apparent in people's behavior, too. Buzzkills bring people's moods down;
fast-talkers cause the pace of conversation to pick up; comedians get people
feeling light, or funny.

What's Better for Business: Logic or Emotion? Answers From Neuroscience

Humans are animals. While we like to think we're captains of our destiny, we're far more driven
by instinct than we know. In many ways, were just glorified apes, even in business.
For over a century, the overriding philosophy in business has been that rational decision-making
is better business. Irrational decisions, on the other hand, were to be avoided. Weve probably all
seen bad executive decisions made based on miscalculated fears, misperceived threats, or
misdirected loyalties.
 Today, science is teaching us that the bifurcation between logic and emotion is not so clear
cut. There is business value lurking in what appears to be irrational. Think of the intense devotion
of startup teams in Silicon Valley. Think of the culture that surrounds iconic companies like Harley-
Davidson. Think of the passion of Apple fans camping out overnight to be first in line to buy a new
product.
Given what science is revealing about the human brain, what are the implications
for business? Janet Crawford is one of the worlds pioneers in applying neuroscience to business. Her
firm, Cascadance, leverages biological design to improve individual and team performance. We dig
into human nature, explore how biology affects innovation, and give you practical tips to increase
the innovation in your ecosystem.
Q: Why does human nature matter in business?
Janet: Business is best when the people providing goods and services feel passion and
commitment to what they are producing and their customers feel theyve received value. The
operative word here is feel. When we use the term rational in business, we usually mean
dispassionately data driven and informed by explicit measureable criteria.
Q: Why do we care so much about rationality in the first place?
Janet: Our love affair with the rational world goes back 600 years to the Scientific Revolution,
which set in motion not only an epic blossoming of human innovation, but also a series of beliefs
about human nature that in large part are being dismantled by recent neuroscience discoveries.
The Brain runs the world in ways we can't easily detect
Q: But whats wrong with rationality as a goal in business?
Janet: The problem is that most of what we view as being rationally determined isnt. Viewed
from the lens of brain science, emotions are elegant shortcuts that allow us to sort through reams of
implicitly stored (i.e. outside consciousness) neural patterns and generate feelings that guide us
toward or away from a course of action. Without emotion, we are biologically incapable of making
decisions. Logic is often the last step in the process. The conscious intellectual brain steps in to
produce a rational backstory to justify impulses generated in the murky corners of the unconscious
mind.
Q: Can you give an example of that interplay between logic and emotion?
Janet: How many times have you left a data-soaked, death by PowerPoint meeting unable to
identify anything faulty with the facts, yet left with a feeling that something wasnt quite right?
Your unconscious mind might indeed be letting you know theres a pattern that doesnt fit. Equally,
it could be that the presentation was sound, but that it overwhelmed the limited capacity of your
rational mind, while failing to satisfy your biological need to feel emotions like trust, acceptance,
and excitement.
Q: Why are humans designed so imperfectly in this way?
Janet: We come preloaded with deep programming, generated from a long tribal evolutionary
history on the plains of Africa. Our DNA tells us to distrust strangers and those who are different
from us. We see this behavior even in infants nine months and younger. We resemble our primate
cousins when it comes to status-seeking behaviors. Power displays like puffing out our chests causes
surges of testosterone, translating into increased confidence in both subject and viewer. Soothing
touch works on our oxytocin systems, enhancing measures of trust. These are but a few examples
of a vast repertoire of unconscious behavioral influences. The point is people act on these feelings of
trust, distrust, confidence, etc. and will find ways to make the data confirm their felt experience.
Q: But arent our rational selves still in control at least most of the time?
Janet: Most neuroscientists would agree that well over 90% of our behavior is generated outside
of consciousness. We are more slaves to our biology than we realize. Our rational minds represent a
very small layer floating atop a vast well of unconscious drivers. Business leaders who understand
biological programming and can leverage it possess an enormous advantage.
 Q: Can you give an example of how biology affects the innovation process?
Janet: Sure. There are two main areas where biology affects innovation. First, human
neurology is built to resist change. After all, if were alive, most of what weve done to get here has
worked! In order to conserve the status quo, the brain generates feelings of discomfort when we try
new things or attempt to change. This is counterbalanced by other systems, driven by dopamine,
that reward exploration and discovery.
Q: How does that counterbalance work in the brain?
Janet: Its a balancing act. When we experience too much stress and threat, the tendency is to
retreat into habitual known responses. When we feel sufficiently (but not overly) secure, we venture
into new territory. The prefrontal cortex, the area resting just behind your forehead, is key to
innovative thought. As Dr. Amy Arnsten of Yale University puts it, its the Goldilocks of the
brain.it wants everything just right.
Q: Whats the second way that biology affects innovation?
Janet: Second, at a fundamental brain level, innovation is the intersection of previously
unrelated neural patterns. We are pattern-making creatures. From the time were born, our brains
are busily encoding any useful and repeating relationship between objects and events to which were
exposed. Since the brain possesses very little capacity for conscious attention, it uses these patterns
to automate our responses to the environment as much as possible.
Q: So our brains create patterns to make sense of things. Thats an efficient way to deal with
our environments, right?
Janet: The great news is that this works marvelously most of the time. The downside is that we
sometimes automate patterns that may have limited utility or which are outmoded hand-me-downs
from another generation or set of circumstances. Also, our neural patterns are constricted by our
unique circumstances and by what weve paid attention to. Theres way more data in the
environment than ever makes it onto our neural maps.
Q: So how do new patterns get formed in our brains?
Janet: In order to create new intersections, its crucial that we cross-pollinate by engaging with
diverse people, activities and experience to provide the raw materials for serendipitous insight. Just
like in venture capital, most of these intersections will go nowhere. The more diversity in the system,
however, the more weeds will flourish and the greater the likelihood that some of them will be
useful!
"From a sheer physical perspective, we humans are a wimpy lot."
Q: Are humans designed to innovate?
Janet: Humans are marvelously unique among the animal kingdom in that were the only
species designed to imagine a future that doesnt exist today and to coordinate action with other
human beings to make our visions reality. No other species manipulates the environment to make
life easier in quite the way that we do. Its what has allowed our species to dominate the planet and
grow to 7 billion strong. Its also what drives us to build businesses and engage in commerce.
Q: Are human beings, therefore, the perfect animal?
Janet: From a sheer physical perspective, we humans are a wimpy lot. Most other mammals
are stronger and faster. An isolated human on the African Savannah will likely become dinner on
fairly short order. But, we possess two amazing superpowers imagination and the ability to
collaborate and pass down learning through language.
Q: How did you first realize that our biological selves and our rational selves were not the same?
Janet: I grew up on a military research base in the middle of the Mojave Desert. My father was
a well-respected rocket scientist and I spent my childhood surrounded by gifted scientific
minds. Even from the perspective of a child, it seemed obvious that highly rational thinkers often
behaved in ways that were anything but. Later, as a manager of scientists and engineers, my
experience was confirmed anew.
 Q: What was your first insight into the power of neuroscience to explain human behavior in
business?
Janet: In the mid 1990s, I was introduced to the concept of an amygdala hijack. The
amygdalae are two small almond-shaped structures in the brain that among other things, monitor
environmental and social threats and allow us to respond reflexively when perceived levels get too
high. They figuratively hijack our volitional choice by redirecting behavioral control to more
primitive responses such as fight, flight and freeze. This small bit of neuroscience went a long way
to explain the defensive posturing, shutting down and avoidance Id seen in the business world.
Q: What other ideas have inspired you in this work?
Janet: Around the same time, I read two pivotal books, Descartes Error and A General Theory of
Love. These books changed the way I thought about human nature and illuminated my
understanding of why people act in, as MIT Professor Dan Ariely aptly puts it, predictably
irrational ways. I was hooked. Since then Ive become a student of the behavioral sciences, reading
research, attending social and cognitive neuroscience conferences and connecting with researchers.
Q: Do you consider yourself a scientist or a business expert?
Janet: I consider myself to be both. My company, Cascadance, works with cutting edge business
leaders to build leadership practices and cultures that leverage the best of our biology. My original
training was as an environmental scientist. I worked in that field for over a decade, both as a
practitioner and a leader, transitioning into business consulting and executive coaching in the mid
1990's. My background in environmental science has not only given me a wonderful systems
perspective on human behavior, but also gave me the strong grounding in science necessary to read
original neuroscience research and ask critical questions. As in any concentrated field of study,
many neuroscientists are unable to see the larger implications of their work. I see myself as a bridge
and translator between the research and its enormously useful real world applications.
Q: What are some simple steps people can take to be more innovative, based on biological
thinking?
Janets suggestions:
1. Take care of your biological instrument The areas of the brain involved in innovation are
particularly sensitive to sleep deprivation, poor diet, lack of social connection and stress in general.
2. Expose yourself to new and different ideas, disciplines, cultures and environments. The
tendency in business is to hunker down, focus, and try to get as much done as possible in as short a
time as we can. If we cant think of a reason that something needs to happen, we deem it a luxury
or waste of time. Great innovations happen when theres a large pool of seemingly unrelated content
to pull from. We have to set time aside to cross pollinate even if we cant see the immediate
application.
3. Be inclusive and create safety People outside the system bring fresh neural patterns. People
within the system often think and see in much the same way. Unless there are practices that allow
diverse elements in your ecosystem to intersect, and unless youve created the safety to prompt
people to speak up, vast amounts of insight will remain undiscovered.
4. Create forums where people can play and prototype All mammals play, and its in play
where we often gain access to our vast unconscious warehouse of neural information.