Impulse Control

Impulse Control

By Matt McDonald
10 Min Read

“I have a confession to make….”

Our client was looking embarrassed.  And a bit worried.

“A confession?  That sounds interesting.  Tell us more”, I replied.

“Well, you know how you strongly advised me not to promote Maria into that Head of Sales role, without running a competitive internal process?  Well, I did it last night, and told the team this morning.”  He was looking distressed now.

“So how did it go?”, Tim asked.  But we already had a bad hunch.

“Well Maria’s pretty happy, obviously… but when I told Kurt, he just exploded.  He started shouting about refusing to report to Maria, about quitting, about how the key accounts he won were really his to take to his next job.  So yeah, really badly.  I think I really need your help to fix this, more than ever.

I regret it now, but I just felt like I really had to do something about the promotion, the decision was really stressing me.  And now I feel like I have to do something big today to make Kurt feel better.”

Not for the first time, and not for the last, Tim and I knew that we would be rearranging our schedules, to help our client* deal with the damaging consequences of their poor impulse control – and prevent another big mistake.


Why is Impulse Control a Problem for Businesses?

We live in an era when we have to make more challenging decisions than ever before, and we often get mixed messages about what we should do, from multiple sources of varying quality.  Some advice we get is inherently conflicted – remember that appliance sales guy who strongly recommends that you buy an extended warranty that you don’t really need is probably getting paid a commission for signing you up, against your better judgement.

Consumer marketing practices have deliberately triggered emotions that compromise impulse control for decades – and “FOMO” is increasingly crossing over from personal to business life.  Spam e-mails tell us about “one day only” discounts   Recruiters tell employers that they will miss out on their dream candidate if they don’t make an offer now.  Perhaps we are not only living in a “buy now, pay later” society – arguably, its also a “choose now, regret later” world.

Despite all these pressures, as I have written before very few of us have received training in good decision making.  That puts a lot of stress on small business owners and leaders, in our experience, when contemplating difficult situations.  Even the wisest of us have made poor decisions based primarily on negative emotions and inaccurate perceptions, at some point.

The pressure to make a decision can be almost impossible to ignore.  Action (“just do it”) has traditionally been viewed by many as more worthy or evidence in itself of good leadership than inaction (“wait and see”).  And some people really struggle to manage their worries about what might happen if they don’t act, right now.

So not only is poor impulse control largely driven by subjective emotions rather than objective facts.  It’s also driven by the many uncertainties that we might worry unduly about, instead of what might be more or less predictable, once analysed.

So in my experience, most mistakes made by otherwise successful business people with poor impulse control are caused by fears and doubts that they can’t “self control”, or even articulate sometimes.


Are You Feeling Lucky?

The other main cause of poor impulse control is confusing correlation with causation – where decisions that have been made poorly in the past still end up well, but for reasons that may be largely unrelated to the decision making process.

Sometimes events go well despite what we personally did to plan for them, simply because of bigger outside factors.  For example, a number of Australian gas projects were actually unprofitable before the Russian invasion of Ukraine in 2022 drove up global energy prices.  Home delivery services boomed during COVID lockdowns.  Neither outcome could have been reasonably planned for years ago.

So if we do “get lucky”, we need to check ourselves, so that we don’t get an inflated opinion of our planning and “fortune telling” prowess, and think that the coin will always land heads up just because we tossed it.


Don’t Confuse Being Impulsive with Being Decisive

Sure, there are times when decisions can’t be put off.  Commitments have to be made, or opportunities are lost.  Risks and losses need to be managed.  Business owners, leaders and managers who know how to make good decisions at the right time are more likely to be successful, it’s true.

However any good carpenter will remind us to “measure twice, cut once”.  Learn the skills.  Gather the facts.  Check your tools.  Evaluate your choices.  Then act, with confidence.

We’ve seen that the best decision makers are not just “decisive” and work with facts wherever possible – they are also very good at understanding the emotions of uncertainty.  It’s not that they are fearless; they know better than most their own fears, and use them constructively, as risk management tools.

Best of all, genuinely decisive leaders will always have a plan about when and how they execute their decisions, and what might need to happen afterwards.  Good plans that deal with stressful issues help to dispel fear, document and communicate known facts, and increase confidence that the decision will be successful.


Mistakes Caused by Poor Impulse Control

In my experience it can sometimes be difficult for people to associate poor impulse control with the consequences… yet those consequences are no less real or damaging.

Here’s just a few examples that I have unfortunately seen multiple times – I would wager that most business owners and leaders have experienced at least a couple of these, without necessarily understanding how their impulse control issues may have made matters worse:

  1. Poor employees hired, or good people promoted out of misplaced loyalty to their “level of incompetence”.
  2. Business partnerships entered into that were badly structured, or with the wrong partners.
  3. Key suppliers and distributors selected without going through a rigorous procurement process, leading to poor value.
  4. Marketing campaigns that were both outrageously expensive AND unsuccessful.
  5. Software systems and premises chosen based on easy availability rather than effectiveness or value, creating unnecessary constraints.

It’s easy to see how many of these mistakes could even be “extinction events” for some businesses.


How to Improve Impulse Control

Yes, it can be done:

  1. Understand first what problems you are solving, by choosing to act.  Are they the right problems to solve, now or ever?  Might they make a problem worse, or even create new ones?
  2. Understand whether you are working from facts or emotions (in stressful situations, emotionally tainted perceptions might masquerade as facts).
  3. Think about the consequences of past impulsive actions – what can you learn from that history about what you might need to do differently?  Mistakes can be valuable learning opportunities too.
  4. Watch out for excuses masquerading as “reasons”.  Rationalisation is not the same as justification.
  5. Ask for advice from someone who is “the best qualified and the least conflicted”.  Sometimes that’s a business adviser like us, sometimes its a spouse or personal mentor.
  6. Weigh the option of actually doing nothing – might that be less risky, on balance?  But never use that as an excuse to procrastinate, or bury your head in the proverbial sand.  Make sure that you monitor the problem to ensure that it is objectively getting better, and not worse or even spawning new problems.
  7. Ensure that all decisions made, even the hasty ones, are consistent with your business values – at least if you make a mistake, you will be acting authentically and will be more likely to maintain the trust of any others that are impacted.  It also helps when faced with an ethical dilemma.
  8. Aim to “do no harm” where that is realistic – but unfortunately that won’t always be possible.  Nearly all opportunities carry risks.
  9. Sleep on it!  Yes, it works.  If you can’t wait until tomorrow, ask yourself what is making this problem so urgent – is someone else distorting the problem or the timeline, based on what is important for them ? And if you can’t sleep, get up and write down your thoughts about what you want to do and why.  Then read your notes in the morning when you are rested, and act only when less stressed.
  10. Forgive yourself when you do get it wrong.  We’ve all done it, its part of being human – and when we understand our impulses as part of who we are, we are less likely to be fearful.

So you don’t have to “give in” to your impulses, after all – count to 10, as they say, and tame your fears and doubts.  I promise you, you won’t regret it later.

* Not quite a true story – I’ve changed it to protect client identities and confidential information.

Matt McDonald

Matt McDonald

Matt has worked as a CFO, Acting CEO, Company Secretary and Head of Sales and HR for 30+ years.

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