Earlier today, an Associated Press/NYTimes article reported on a study published in the August 2013 issue of the journal Science, authors Anandi Mani, Sendhil Mullainathan, Eldar Shafir, and Jiaying Zhao reported that the poor show reduced cognitive capability (IQ) and are less effective at decision-making specifically because of their financial circumstances. In essence, the authors’ studies showed that individuals faced with financial stress lose about 13 IQ points because their financial problems dominate their thinking to the detriment of their ability to solve other problems.
Oak & Apple Partners focuses on the quality of management’s decision-making in organizations under stress. The parallel of individuals and companies (comprised of people, after all) under financial stress is unavoidable. Isn’t it likely that management teams under financial stress are so pre-occupied with their financial constraints and peril that they are worse at making good decisions with respect to strategy and tactics in sales, marketing, operations and other areas?
If you’re concerned that financial (or other) stress is affecting your company management’s decision-making, you may find our free executive self-evaluation guide Decision-Making in the High Stress Environment to be a useful and quick tool to assess your management team’s decision-making under stress. To get your free copy, simply click here.