Mood- vs. Goal-Based Decision-Making

When I started at Stanford, I thought I wanted to major in Economics or Psychology.

I took classes in both.

The premise of economics is that people are rational.

The premise of psychology is that people are not rational.

I remember wondering... which field is right?!?

It took me a decade later to come to the conclusion that the psychologists were right.

People are often not rational at all.

This includes you and me.

Everyone is irrational; the only question is whether they are aware of it or not.

This is important to recognize because it influences how you make decisions.

It also influences how other people make decisions that impact your life and career.

There are two kinds of decisions people make:

  1. Mood-Based Decisions
  2. Goal-Based Decisions

When we make a decision because it feels good, that’s a mood-based decision.

When we make a decision that moves us towards our goals (even if it doesn’t necessarily feel good), that’s a goal-based decision.

When you observe your own decision-making, it’s important to recognize why you’re making a particular decision.

If you’re frustrated at not meeting your macro-level goals, take a look at your micro-level decision-making. Are you making goal-directed decisions?

If your goal is to win a 10K race, but every day you choose to skip your training run, don’t be surprised when you don’t win.

Mood-based decisions aren’t necessarily bad.

Sometimes they can be useful to highlight unconscious needs that aren’t being reflected in your explicit goals.

For example, let’s say your goal is to get a promotion in one year instead of three.

Let’s further say you develop a plan to work 100 hours a week in order to achieve this goal.

Two months into your plan, you notice you quit work early and “only” work 60 hours a week.

This decision isn’t inherently good or bad.

The question is why you are making it.

Do you miss your friends and family and choose to spend time with them?

Sure that’s a mood-directed behavior. You let your feelings of loneliness guide you to work less than you had planned, in order to spend time with the people you care about and like.

If these decisions continue, it might suggest you have a need for social interaction and connection that wasn’t being taken into account in your original goal of getting a rapid promotion in one year.

That can be a useful insight.

On the flip side, maybe your goal is to build a company and sell it for a billion dollars in the next ten years. When push comes to shove, you don’t do any work that leads you to your goals.

Again, this is mood-directed behavior.

But, the key question is which feeling is motivating this behavior.

If the feeling is one of overwhelm and intimidation, it may signal that the nature of the goal (building a company) is fine, but the magnitude of the goal (one billion market value in ten years) is counter-productive to progress.

In this case, it can make sense to keep the same goal direction (build a business), but changing the magnitude or timeframe of the goal (perhaps build a profitable business in two years to start) can be helpful.

The key with all of this is to develop emotional self-awareness.

Feelings of loneliness, fear, and overwhelm all provide insight into what we need and don’t need. Feelings of anxiety, greed, joy, and pain also provide us with useful insights into what’s optimal for our performance.

However, if you’re unaccustomed to noticing your feelings and developing emotionally informed decision-making practices, you will have a much more difficult time in your career and life.

This is why the highest achieving people in the world often have very high EQ (emotional intelligence) and merely adequate intellectual intelligence (IQ).

Self-sabotage comes from a lack of emotional self-awareness.

Persisting in no-win (as opposed to merely difficult) situations also comes from a lack of emotional self-awareness.

Quitting before you even try is another such sign.

Passing up big opportunities because you feel like you’re an “imposter” is another example.

Apologizing for your ideas (which a lot of very smart women do) also comes from a lack of emotional self-awareness.

When you do not know yourself, your feelings, and how to interpret them, you will make decisions that are at best sub-optimal, and at worst, really dumb.

If this is an area of your life you'd like to improve, I urge you to consider my program on How to Develop Emotional Intelligence (EQ) to Advance Your Career.

The program will be available for a limited time later this month. To be notified about its release and receive other emails about developing your EQ, just submit the form below.

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