Entrepreneurship

Emotional Reasoning: A Cognitive Distortion Influencing Business Decisions

Dan Nicholson

Emotions are a fundamental part of human life, acting as spark plugs for our actions and decision-making. However, when emotions blur the boundaries between feelings and facts, it paves the way for a common cognitive distortion known as emotional reasoning. By understanding this, you're opening up a clear path to more effective decision-making, an enhanced sense of certainty, and getting closer to achieving your objectives.

Emotional Reasoning: The Great Deceiver

Emotional reasoning refers to the tendency to let our feelings guide our interpretation of reality. It is the belief that what we feel must be true irrespective of the evidence. For example, if you feel like a failure, you automatically believe that you are a failure. In a business context, it could take the form of feeling anxious about a presentation and subsequently presuming it will go poorly.

Such reasoning can distort our perception, leading to inappropriate decisions and actions that may not reflect reality or our actual capabilities. We can end up trapped in an echo chamber of self-doubt, perpetuating a cycle of negative decision-making and stalling our progress towards our goals.

The Impact of Emotional Reasoning on Business Decisions

In the business world, emotional reasoning can derail rational and objective decision-making. It often results in underestimating our abilities or making overly pessimistic risk assessments. For instance, if we feel overwhelmed by a new business venture's complexities, we might reason that we're unfit to undertake it, leading to missed opportunities and stunted growth.

The truth is, these emotions aren't necessarily reflective of our actual potential or the factual reality of the situation. By mistaking our feelings for facts, we could be turning away from the path that leads to our goals.

Navigating Towards Certainty and Success

The first step to overcoming emotional reasoning is recognizing it. When you catch yourself making decisions purely based on feelings, challenge yourself to separate the emotion from the fact. Ask yourself: Is there evidence to support what I'm feeling? Am I conflating my feelings with reality?

Next, cultivate a balanced perspective. Emotions are an important aspect of decision-making; they signal values, priorities, and potential risks. However, they shouldn't overshadow objective evidence and rational thought. Strive for emotional intelligence. This involves understanding, managing, and effectively utilizing your emotions in a balanced way to make the best decisions.

Finally, build your resilience. Remember, it's okay to have feelings of self-doubt or fear, but they don't define you or your abilities. Confidence comes with time and repeated positive experiences. By taking calculated risks and stepping out of your comfort zone, you can amass evidence of your capabilities. Weakening the power of emotional reasoning.

By proactively addressing emotional reasoning, you're creating a clearer path to make confident decisions. This not only leads to a greater sense of certainty in business but can also accelerate your journey towards achieving your personal and professional goals. Remember, emotions are an integral part of us, but they don't solely define our reality.

Overcoming emotional reasoning is about gaining clarity, enabling you to make decisions with conviction and purpose, and ultimately bringing you closer to the things that matter most.

Pause and reflect:

  • Can you recall a time when emotional reasoning influenced your business decision?
  • How do you distinguish between feelings and facts when making critical business decisions?
  • How does emotional intelligence play a role in combating emotional reasoning? 
  • How has overcoming emotional reasoning helped you gain more certainty in your decision-making process and get closer to your goals?
  • Can you share examples where stepping out of your comfort zone and taking calculated risks has helped diminish the impact of emotional reasoning?
  • How do you maintain a balanced perspective between emotions and objectivity in decision-making, especially during high-pressure situations?

Dan Nicholson is the author of “Rigging the Game: How to Achieve Financial Certainty, Navigate Risk and Make Money on Your Own Terms,” deemed a best-seller by USA Today and The Wall Street Journal. In addition to founding the award-winning accounting and financial consulting firm Nth Degree CPAs, Dan has created and run multiple small businesses, including Certainty U and the Certified Certainty Advisor program.

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