Boiling Frogs: Decision Making Under Stress

Any guys (and perhaps a few ladies) who grew up around ponds have played with frogs. If we paid attention, we learned great lessons about stress management from frogs.

Those of us who were mischievous tossed frogs in boiling water only to have them pop out unharmed.  “Kind” kids who put frogs in water and heated it to boiling ended up with dead frogs.

We find that understanding how stress changes behavior patterns is key to translating that understanding into the mechanics of action to maximize opportunity and minimize risks of execution.  Immediate near-term threats can be eliminated by reflex, like frogs jumping out of boiling water. Threats that emerge over time, like frogs floating in increasingly hotter water, tend to bias executives decisions toward positive, rewarding information that avoids negative, punishing conclusions.  The net result?   Typical stress responses result in bias toward feel-good, optimistic actions while blunting negative observations.

We know and have personal experience as top executives living with stress every day. We occasionally have night terrors over decisions that affect an organization’s performance and the lives of employees.  Unless we experienced the chaos inherent in major new business launches or managing companies out of financial distress several times in our careers, we may be blind to how stress influences normal decision making.

Both hyper–growth and turn-around situations are marked by unfamiliar, rapidly changing conditions requiring an immediate shift in leadership and management styles and tactics. These “long tail” episodes in business cycles are characterized by events occurring under severe time compression. Rapid change in the conditions an executive faces can result in a mental tunnel vision whereby the executive is often less capable of adapting to changing conditions in real time. Chaotic conditions create difficulty in prioritizing the direction, type, intensity, and pace of actions that executives will choose to manage such situations effectively.

Unlike frogs, most people, when startled or acutely frightened by something, will spend time in a shocked reaction, not doing much in the way of analytical thinking or purposeful actions. They cannot immediately act upon the situation due to psychological and physiological changes. Simply, the perceived demands on an executive’s resources exceed those available to influence events. That is one reason why stress causes decision makers to gravitate towards positive and rewarding stimuli and steer clear of the negative ones.  Because of this, stress appears to help people learn from positive feedback and impairs their learning from negative feedback according to research done at University of Southern California. Hence, decision making is unbalanced or biased and likely to exacerbate outcomes rather than improve them.

At Oak & Apple Partners, we offer programs built around functional disciplines such as finance, sales, marketing, logistics and information systems, to help executives minimize the risk of execution and strengthen strategic responses under high stress conditions. On a personal level we recommend exercise and athletic competition as a component of individual stress management. Reduce your stress and make better decisions or you’ll be at risk to croak.

This entry was posted in Innovation, Leadership, Management Practices, New Products, Performance & Profitability, Uncategorized and tagged . Bookmark the permalink.

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