Emotional Intelligence in Leadership: Decision-Making and Biases

This guest article on emotional intelligence in leadership is co-written by two of our trusted partners: Francesco Chevallard and Haris Mexas. It discusses decision-making strategies and relevant cognitive biases from the perspective of what they see in their roles as consultant and coach.

In our work as a Digital Payments Consultant (Francesco) and as a Leadership Coach (Haris), we regularly come across decision-making processes that lead to outcomes of varied levels of success.

In this article, we delve into the intricate process of decision-making, guided by the main principles of emotional intelligence in leadership and bias awareness. We will explore the foundational principles of emotional intelligence, followed by a step-by-step analysis of the decision-making process and a sketch of some of the biases involved. Recognizing the role of biases will prepare us to effectively integrate emotional intelligence into decision-making. This structure aims to equip leaders with the tools to navigate complex decisions with greater awareness, and strategic insight.

Emotional Intelligence principles

The theory of emotional intelligence proposes that our ability to recognize, understand, and
manage our own emotions, as well as to recognize, understand, and influence the emotions of
others, plays a critical role in our success in various aspects of life. In our view, it serves as a
reminder of a crucial neuroscientific fact: The psychological function of cognition (under which decision making traditionally falls) is not independent of one’s emotions. Unless we are acutely aware of the fact that it is our multi-dimensional human brain that makes decisions, we will not be able to draw a comprehensive account of how to lead ourselves and our teams to more success.

Let’s consider the following emotional intelligence components, as sketched by Travis Bradberry in Emotional Intelligence 2.0:

• Self-awareness involves being conscious of our emotions and how they can influence our thoughts and decisions. 
• Self-management refers to controlling our emotions and impulses, which is essential in handling the stress and pressure that often accompany decision-making scenarios.
• Social awareness is about understanding and empathizing with others. Empathy in leadership acts as a bridge, connecting the leader’s vision with the team’s emotional landscape. 
• Relationship management involves the ability to effectively communicate, influence, and work well with others. This aspect of emotional intelligence is key in navigating the complexities of group dynamics.

Decision-making methodology

Making decisions is complicated. In our modern environment we are bombarded with information and overloaded with many potential choices. As a result, decision-making processes can become anxiety-ridden and overwhelming.

As leaders, we find ourselves in work situations where the stakes are high. We are often compelled to make decisions in a short time and without much external support. In these cases, it is useful to have a strategy. The methodology delineated in decision-making frameworks is foundational to mastering the art of effective decision-making. This approach encompasses the following steps:

1. Correctly identifying the issue
2. Gathering relevant information
3. Identifying and weighing alternatives
4. Making the choice and acting on it

For each of these steps there are many small obstacles to overcome so that you can make a good decision. Biases, as we will see, can contribute to incorrect decision making.

The first step, correctly identifying the issue, may seem the simplest. Normally the issue will be brought to your attention by colleagues or will arise from an activity that your team is conducting. In such cases, the issue will be already defined and specific. What should you do then? Make sure that you are addressing the root cause of the problem and not merely treating symptoms. Consider the “5 Whys” as an example of a causal discovery technique: after you find a first reason for the issue, ask yourself why this reason is present and you will get to a deeper level of analysis; repeat this step another 3 times and you will gain the necessary clarity on what you are essentially trying to solve.

Next up is information gathering. Study well any data you can find and speak with every person that might have a valuable perspective on the issue. You may not have weeks or even days to go through all the possible material so prioritize the information to analyze and the people to talk to.

Once you have a solid grasp of the issue, it’s time to lay down possible solutions. Start big, by listing every alternative decision you could make and then narrow it down, excluding those that look implausible, too risky or not cost-effective. Try assigning scores to each solution, so you can weigh one against the other.

Finally, it’s time to make your decision. It may be useful to take a break and come back to it after a little while, with a fresher mind. Examine the alternatives you selected, revisit the framing of the issue at hand, and double check the key pieces of information. Finalize your decision and adhere to it.

Leadership biases

Developing a keen awareness of possible prejudices is imperative in the application of the aforementioned steps. In what follows, we will elucidate several biases that are critical to acknowledge and address. The four biases we will discuss more in-depth below are:

• False Causality Effect
• Primacy Effect
• Sunk-Cost Fallacy
• Availability Bias

1. False Causality Effect

The false causality effect is when we make correlations that do not exist. We are naturally drawn to find meaning in what happens around us and that can lead us to jump to wrong conclusions.

Example: Say you noticed that a product is selling less than it used to, and that started happening around the same time a new feature was introduced. The temptation to blame it on the new feature and just getting rid of it will be strong, but you should take a step back and consider if that is the real problem.

2. Primacy Effect

The primacy effect will bring you to consider the first pieces of information you found as the most important ones and discard all the data that don’t fit them. Similarly, the confirmation bias will lead you to only see information that confirms your initial hypothesis. 

Example: You probably encountered them before, when you got absolutely convinced of the reason for a software bug or an increase in customer churn because of an initial conversation with someone. And you probably saw how difficult it was to get rid of the initial persuasion, even when contrary evidence started showing up.

3. Sunk Cost Fallacy

The sunk cost fallacy occurs when decision-makers continue investing in a project or decision based on the amount already invested, rather than current and future benefits.

Example: Consider a company that continues funding a failing product because it has already spent a significant amount on its development. Despite clear market signals that the product won’t succeed, the decision to keep investing is driven by the desire not to ‘waste’ the initial investment, ignoring the potential for greater losses.

4. Availability Bias

The availability bias occurs when people make decisions based on the information that is most readily available to them, rather than all the relevant data.

Example: Picture a manager who decides to focus sales efforts on a particular region because recent reports highlight successes there. They neglect to consider comprehensive market research that suggests other regions may offer better long-term potential. This reliance on immediately available information can lead to missed opportunities and skewed decision-making.

For a more exhaustive exploration of biases and their profound impact on decision-making procedures, we highly recommend Beirem and Philip’s book The Dynamics of Business Behavior which provides an in-depth overview of evidence-based methods for dealing with biases based on Neurofied’s methodology.

Integrating Emotional Intelligence into Decision-Making

The incorporation of emotional intelligence principles into a decision-making methodology enables us to effectively address a lot of possible pitfalls, as well as counter some of the most common biases.

Increasing your emotional intelligence boils down to more effectively navigating the complex interplay of emotions and thoughts. This is a skill honed through practice, which in turn can be guided by the following synthesis of the preceding sections of the article:

1. Self-awareness (confirmation bias)

This awareness is vital in correctly identifying issues without our emotions skewing our perception.

Envision a leader who understands their own motivations and biases with exceptional clarity. This individual is acutely aware of their own bias towards seeking out information that aligns with what they already believe (confirmation bias). By recognizing this pattern, they make a deliberate effort to consider a variety of viewpoints and evidence that may challenge their initial beliefs. This level of self-insight serves as a guiding force, helping them navigate through the potential pitfalls of bias, leading to decisions that are more balanced and grounded in objectivity, rather than being mere reflections of personal preference.

2. Self-management (availability bias)

Self-management enhances decision-making by anchoring you to your course of action and allowing you to maintain it by resisting immediate emotional responses.

Consider an innovator confronted with a novel proposal that, at first glance, seems risky or untested. Rather than being swayed by the availability bias—the tendency to overestimate the importance of information that is readily available, e.g. recent failures—they take a moment to ground themselves. By acknowledging their initial apprehension and then methodically evaluating the new idea against a broader set of data and experiences, they move beyond their immediate reactions. This thoughtful pause allows them to assess the proposal’s value from a place of informed consideration, not just gut reaction. In doing so, they ensure their decision-making is guided by a comprehensive understanding of the situation, mitigating the influence of recent but potentially unrepresentative examples.

3. Social awareness: showing empathy (sunk cost fallacy)

This skill is crucial in the information-gathering phase, where considering diverse perspectives and emotional responses can lead to a more comprehensive understanding of the issue at hand. But it also allows you to use adaptability if needed.

Picture a scenario where a project director is determined to push forward with an initiative that, despite significant investment, is clearly failing to meet its objectives. The sunk cost fallacy might compel the leader to continue investing in the project, driven by an emotional commitment to the resources already expended.

An empathetic leader, however, recognizes not just their own emotional attachment to the project but also discerns the team’s morale and perspectives. They understand that continuing down an unproductive path dampens team spirit and trust. By acknowledging these emotional cues and critically assessing the situation, the leader can make a more informed decision. They might choose to reallocate resources to more promising ventures, thereby steering the team towards opportunities with a better outlook for success.

4. Relationship management (false causality effect)

Effective relationship management is crucial at all stages decision-making.

Visualize a setting where a CTO of tech company is overseeing the rollout of a new software platform. As the project progresses, they notice a decrease in team productivity, which coincidentally aligns with the software’s deployment phase. Initially, it’s tempting to draw a direct line between the new software’s introduction and the productivity slump, a classic example of the false causality effect—assuming a cause-and-effect relationship without sufficient evidence.

Yet, the CTO decides to delve deeper. They prioritize open communication and relationship management, engaging with the team to uncover the real reasons behind the productivity drop. These discussions reveal a range of factors at play, including the need for additional training and adjustments to workflow, rather than the software itself being the issue.

Final notes on emotional intelligence in leadership

Effective leadership coaching can help you on the journey of integrating emotional intelligence into your decision-making. It provides a structure for leaders to develop and hone their emotional intelligence skills, transforming intuitive reactions into informed strategies. Through professional guidance, leaders learn to navigate their own biases and emotional triggers, fostering a culture of thoughtful decision-making and empathetic leadership within their organizations.

The integration of emotional intelligence in leadership and decision-making is not just beneficial but essential for effective leadership. As we continue to explore and expand our emotional intelligence, through avenues like behavioral consulting and leadership coaching, we pave the way for more insightful, balanced, and successful leadership practices. This holistic approach not only elevates individual leaders but also propels organizations towards a future where decisions are made with clarity, empathy, and strategic insight.

We hope you found this guest article by Francesco Chevallard and Haris Mexas on the role of emotional intelligence in leadership useful. If you’re looking for a behavioral business partner to drive change in your organization, we’d be happy to schedule a call. Want to learn more about the application of brain and behavioral insights in management, HR, growth and innovation? Then read our blog or check out our YouTube channel!

About Neurofied

Neurofied is a behavioral science company specialized in training, consulting, and change management. We help organizations drive evidence-based and human-centric change with insights and interventions from behavioral psychology and neuroscience. Consider us your behavioral business partner who helps you build behavioral change capabilities internally.

Since 2018, we have trained thousands of professionals and worked with over 100 management, HR, growth, and innovation teams of organizations such as Johnson & Johnson, KPMG, Deloitte, Novo Nordisk, ABN AMRO, and the Dutch government. We are also frequent speakers at universities and conferences.

Our mission is to democratize the value of behavioral science for teams and organizations. If you see any opportunities to collaborate, please contact us here.