Mikelast blog, I reviewed Chip and Dan Heath’s excellent new book, Decisive: How to Make Better Choices in Life and Work. The book is full of practical wisdom for anyone, especially for leaders (who are constantly making decisions), and it is easily applicable for ministry and non-profit environments. One of the most meaningful sections for faith-based organizations is the Heath’s discussion of “loss aversion.” They offer this simple illustration:
Imagine that we offer you the chance to play a game. We’ll flip a coin; if it turns up heads, you’ll win $100, and if it lands on tails, you owe us $50. Would you play? Most people wouldn’t, because they are loss averse: Losing $50 is so painful that even a potential gain twice as large doesn’t seem sufficient to compensate. Indeed, researchers have found again and again that people act as though losses are from two to four times more painful than gains are pleasurable.How do you overcome loss aversion? The Heath’s have a number of recommendations for dealing with the short-term emotion that can undermine decision making. One of the simplest is to ask, “What would I tell my best friend to do in this situation?” You would tell your best friend to flip the coin. Would you tell your best friend to have the hard but necessary conversation with the boss? Would you tell your best friend to launch the new initiative? If that’s what you would tell your best friend, then apply the same advice to yourself. You might be surprised at how much clarity it brings in the face of loss aversion.]]>
