I read a very interesting New York Times article yesterday, describing a study where participants were asked whether to recommend a vaccine (which came with a 5% risk of death) for a disease that you had a 10% chance of catching and dying from. Logically the vaccine is the better choice, but people’s answers differed drastically based on the role they were in:

Only 48 percent of the participants said they would take the vaccine themselves. But 57 percent said they would give it to their children; 63 percent said that if they were doctors they would give it to patients; and 73 percent said that if they were the medical director of a hospital they would recommend the vaccine for all patients.
Nicholas Bakalar, New York Times

The pattern here is that the more distanced you are from the subject, the more likely you are to rationally recommend the best choice. The closer you are to the situation, the more its influenced emotionally and important facts get lost in the decision making.

This phenomena doesn’t necessarily stop at medicine or risk of life, as the same can apply to tough decisions affecting the survival of a business, your personal finances, or even a particularly intense hand in poker that should be folded. I’ve definitely noticed it for my own self, as I often take much longer to make a rational conclusion for the needs of my own business than when others ask my thoughts. It’s very difficult to accept taking on risk for yourself, no matter how low it may objectively be or how poor the alternatives are.

This is clearly a dangerous tendancy as emotionally driven incorrect decisions can be devastating to a company. In addition to being consciously aware of this habit, you can help combat it by regularly seeking outside advice. It’s not unusual for a business of any size to have some form of advisory council. All forms of mentoring services are available out there too, from experienced friends to volunteer services to business consultants. I’ve had some great insights and been able to make some tough choices just by occasionally having other entrepreneurs I respect provide an outsider sanity-check on my situation.

If you’re the only who has been reading your business plan, maybe it’s time to seek a fresh outlook.

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This entry was posted on Thursday, June 22nd, 2006 at 6:48 am and is filed under Entrepreneurship, Startups, Business Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.