How Thinking like an Artist Can Improve Your Business Decisions

Business decisions need to be purely rational and data-driven, right? Not quite. It turns out emotions play a much bigger role in successful decision-making than we realize.

May 17, 2024

Insights in Action Baba Shiv

Illustration by: iStock/MicroStockHub

Conventional wisdom puts business leaders and artists at odds in terms of thinking and decision-making styles. Baba Shiv, Sanwa Bank, Limited, Professor of Marketing at Stanford Graduate School of Business, who also teaches in Executive Education programs, views it differently. He believes that thinking like an artist — embracing intuition and instinct — can help leaders in any industry make better decisions.

Rational Thinkers?

From Greek philosophers to the French Enlightenment and beyond, humans have prided themselves on being rational thinkers. “It’s embedded in our minds from childhood,” Shiv says. “If you’re making consequential decisions, be as rational as possible.” There’s just one problem: According to Shiv, our rational brain is responsible for a mere 5–10 percent of our decision-making.

He showed this through an experiment where test subjects tasted five wines ranging from $5 to $90; in reality, there were only three wines and the prices were fake. Shiv’s team monitored the subjects’ brain waves and found greater activation of pleasure areas when they sampled what they thought were the higher-priced vintages. The idea of drinking an expensive wine caused more pleasure, which translated into the subjects believing that those wines actually tasted better. They thought they were issuing a rational verdict on the quality of the wine, but, in fact, it was determined by the emotions that had been activated.

Trust Your Gut

Relying on your intuition isn’t as impulsive as it might seem. The emotional brain makes lightning-fast assessments based on past experiences, perceptions of the situation, and other factors that may not register consciously but which underpin our instincts. Shiv asserts that it’s much more productive for business leaders to embrace emotion and intuition — and learn how to employ them effectively — than to try to discount what’s already behind so much of our decision-making.

Shiv points out that the rational brain is good at constructing narratives to rationalize what the emotional brain has already decided to do. These narratives can also be used to explain the decision to team or board members, clients, or other stakeholders and persuade them of its potential success. “It’s not making the ‘right decision’ but making the decision right,” he says.

If emotion were irrelevant, we would have evolved very differently.
Baba Shiv

Additionally, emotions are key to giving leaders the confidence to implement their decisions and commit to them. Without that conviction, they’re more likely to doubt their decision at the first stumbling block, giving up instead of persisting through challenges to a successful endpoint.

Keep Your Confidence in Check

While it’s important for executives to believe in their decisions, they should always be willing to revisit them and make adjustments as needed. There’s a difference between having enough confidence to ride out a few bumps in the road, and having so much hubris that warning signs are ignored. Shiv calls that level of delusional conviction “an escalation of commitment bias” — more money and resources are thrown at what is turning out to be a bad decision, instead of taking a judicious look at information and possibly changing course.

Shiv advises business leaders to examine their decisions at a regular cadence, such as every quarter, when they should consider all the possible negative outcomes as well as the positive ones. This will give the brain a more balanced view, making it more receptive to any changes that might be necessary.

Balancing the Scientific and Artistic Mind

It’s important for leaders to balance the emotional and rational aspects of a decision. “Most of the biases in decision-making are rooted in emotion,” Shiv says. As a leader, you’ll want to minimize emotion — and potential bias — and focus more on reason when you’re making consequential decisions like hiring, acquisitions, or investments.

Additionally, leaders with longer tenure tend to make decisions more conservatively: The same experience that helps them rely successfully on their instinct has also seen a fair share of failures, and this leads to a greater loss aversion over time. To avoid imposing unnecessary constraints on decisions, leaders should build teams with a diversity of identities, ages, experiences, and tenure in mind. Such teams can offer different insights and solutions, and recognize potential pitfalls that aren’t obvious to the decision-maker.

Putting Emotions to Work

Here are some best practices for incorporating emotions into your daily business practices:

  • Recognize that many decisions are already based on emotions. Learn to embrace a less rational view and use it to your advantage.
  • While data should still inform decisions, don’t dismiss emotions. You won’t be committed to decisions if they don’t “feel” right, and the doubt will likely make you give up too soon.
  • Build a narrative that rationalizes and explains your decision. It will help solidify the confidence to stick with it — and you can use it to convince others of the decision’s potential benefits.
  • Balance focusing on the positives with a hard look at the negatives. Conduct a premortem to try to predict where a decision could fail, then check back regularly to ensure you’re not ignoring information that indicates you need to revisit the decision.
  • Make it an organizational priority to build teams with a diversity of identities, experiences, and ages for a broader perspective on your decisions.

Explore More Stories

March 22, 2024

Strategic (Re)Thinking: Is Your Approach to Organizational Strategy Holding You Back?

Making your organizational strategy an iterative, evolving priority can help you compete and adapt to rapid change. And conversations and communication may be the key.
Strategic (Re)Thinking
March 21, 2024

Inspiring Change: An Insider’s Look at LEAD Me2We

In this Q&A story, we bring together three remarkable voices to share their insights on the Stanford LEAD Online Business Program and the participant-led, in-person event, Me2We.
Stanford LEAD past participants engage in Me2We activities
February 08, 2024

Giving Ex-Offenders a Second Chance at Life

Singapore Prison Service official Matthew Wee Yik Keong is transforming how the system rehabilitates inmates and ex-offenders — with the goal of creating a safer, more inclusive society.
Matthew Wee Yik Keong