Your Entrepreneurial Decision Making Is Impacted By Anxiety

The Entrepreneurial Challenge

Here is how it happens, and what to do about it. Max is a brilliant and accomplished tech professional. When he and his co-founder started a business, it was the first time he had worked outside of a formal corporate structure. There were multitudes of decisions to make on a daily basis: product, financing, marketing and sales, hiring, leading. You all know the drill. Some were big picture decisions, and some daily and procedural decisions. In our coaching sessions Max often became overwhelmed to the point of being paralyzed. Together we figured out the anxiety traits (historical and situational) that led to his overwhelm. We sorted out the field of all possible options and drilled down to what were the most appropriate decisions. He used several of the tools I recommended.

The Mental Health Impact

I have spoken to hundreds of entrepreneurs about the unique mental health risks they face when starting their business. We focus on things such as managing the emotional roller-coaster, stress and burnout, resilience, the importance of social support and self-care. We then focus on the cost to the business of compromised mental health on the part of the founder(s) such as lack of focus, poor communication, impact on relationships, decreased levels of energy and optimism.

The Decision-Making Challenge

Sometimes we forget about the impact of mental health challenges on decision making. Entrepreneurship involves making tough decisions and taking risks. Decisions often need to be made quickly. Poor mental health can impair decision-making abilities and lead to excessive risk-taking or risk-aversion. Anxiety can influence your decision making by creating worry that you'll make the wrong choice or a choice you'll regret later. This decision making challenges often surfaces during times of growth and then dissipates as the entrepreneur improves their mental health and self-awareness, and master some tools.

The Neuroscience of Anxiety

When we're feeling anxious, we've fired up a set of structures in our brain called the limbic system. That's an area responsible for emotional responses, memory, and motivation. Our best reasoning and decision-making comes not from the limbic system, but from the prefrontal cortex, our "thinking brain." The limbic system and the prefrontal cortex fight for attention. If your brain is in fight-or-flight mode, your overheated limbic system can cycle through an endless series of scary possibilities. Scientists call that "amygdala hijack"— it's like your prefrontal cortex has lost control of the vehicle altogether. That spinning feeling can paralyze your ability to make a choice. And with your limbic system in control, you might not like what you settle on anyway. Because they are emotionally driven, those are decisions that might not be your best decisions.

Understanding Anxiety's Impact

There are two principal information-processing biases characteristic of anxiety:

1. A bias to attend toward threat-related information

2. A bias toward negative interpretation of ambiguous stimuli (information, options, thoughts)

For stimuli with more than one potential interpretation, anxiety is associated with a tendency towards a more negative perception. Anxious individuals unrealistically judge negative outcomes to be more likely than positive ones. Their negative biases extend to their thoughts about their own adequacy.

Risk Aversion and Anxiety

The amount of attention paid to an aversive choice option predicts its avoidance, suggesting that attentional bias toward potential adverse outcomes of risky gambles may cause anxious individuals to favor certain and safe alternatives. Measures of trait anxiety, worry, and social anxiety in healthy participants are all predictive of heightened risk aversion.

Strategies for Managing Decision-Making Anxiety

Here are some strategies and tools that my clients have used to win the war over anxiety:

• Break big decisions down to smaller ones

• Create a checklist

• Eliminate too many options

• Reflect on past decisions

• Talk with trusted friends, family, your coach

• Make a list of pros and cons

• Journal about your feelings

• Set a deadline and stick to it

The Path Forward

Max has become more comfortable with himself, his decisions, and his reduced level of anxiety. He is calmer, more confident, and more productive. The bottom line in his business reflects his growth.

We all have places where we get in our own way. Anxiety need not be one of those places.