As the tax year end looms large, many organisations will be thinking about how to best deploy any remaining budget. With finance directors eager to cut perceived fat, ‘use it or lose it’ is both a timely call to action, and a potential warning about what could happen when making decisions under time pressure.
On occasion, time constraints can be useful to making decisions. A ticking clock can provide an impetus to action when you might otherwise prevaricate or leave things alone. But, when it comes to important decisions, behavioural science research suggests that pressing deadlines can create a greater potential for error.
So, what are some of the important issues associated with time pressure and how do we typically react?
- Negative emotions can impede judgement. Worry and anxiety are just two of the unpleasant emotions associated with time pressure. When ‘sweaty palm’ moments occur, our overriding motivation is to manage the negative emotion, rather than focusing on how we can make a good decision.
- Urgency to action forces us to the action phase too quickly. Good decisions tend to follow a process that includes considering objectives and goals; generating a range of options that can achieve these goals; then evaluating and implementing the best action. Time pressure often drives us to the action phase too quickly, leading us to focus on actions that are of limited value to our organisation’s goals.
- Time pressure increases our reliance on intuition, rather than slow, deliberative thinking. When we’re dealing with very familiar situations, intuitive fast thinking that involves doing what we did last time, following what others do, can be a good way to make decisions. But when we’re dealing with important, relatively unfamiliar capital or strategy projects, fast thinking can compromise decision quality.
There are several measures you can take to mitigate the potential negative effects of time pressure:
- Involve others in the decision-making process. Even if you have a looming deadline, you can increase the total thinking time by working as a team.
- Force yourself to think about objectives and goals. There may well be pressure to act, but just five minutes spent writing these down means that you are less likely to choose something that is incompatible with your organisation’s strategic objectives.
- Sleep on it to widen your perspective. Emotional states naturally vary over any 24-hour period with each state inducing a different perspective on the decision (the information we draw on when making a decision is influenced by our emotional state). Different emotions broaden your understanding of the decision.
Lots of budget decisions will be made over the next couple of months. And, while there will be a pressure to act quickly, it makes good sense to consider how to mitigate the potential negative effects of time pressure to make the final decisions as effective as possible.