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Surprise! Stress makes us poorer decision-makers

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Whether it's an inability to focus, lack of energy or absenteeism, anxiety has long been known to take a toll in the workplace. Now another drawback can be laid at its door: difficulties in making important decisions that can lead to adverse consequences right up the chain into the executive suite.

A study from the Wharton School at the University of Pennsylvania has found that anxiety can can cause people to not only seek more advice from others when faced with a decision but reduce people's ability to discern the good advice from the bad.

Anxiety triggers a flight response, said Maurice Schweitzer, a professor of operations and information management at the Wharton School and co-author of the study. "When we feel anxiety," he said, "we want to flee. We want to get out of that situation."

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Dr. Schweitzer likes to use the example of giving a presentation and our seemingly hard-wired sense of anxiety when doing so. A million years ago, a bunch of people staring at you wordlessly was probably a sign of danger or hostility. "So even when we know exactly what we want to say," he pointed out, "the prospect of speaking in public can arouse feelings of anxiety."

For Ronald Burke, professor of organizational studies at York University's Schulich School of Business, the findings in the Wharton study only make sense.

"When people are anxious or under high levels of stress they are likely to make more mistakes," he said. "Because of anxiety they feel pressure to act quickly."

That impulsiveness, he added, can make it hard for people "to separate the wheat from the chaff."

Anxiety, in other words, can cloud rational thought. The result – from blowing a sales pitch to making a bad investment – can have an impact on a company's bottom line.

And think about its potential effect in negotiations. If one side opts to make the other side feel nervous, the anxious negotiator could agree to something he or she will later regret.

"The modern workplace is particularly likely to trigger anxiety," said Dr. Schweitzer. "Economic uncertainty, difficult clients, meeting with an aggressive boss, the need to make sales – there's a lot of anxiety that can come with all those interactions."

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Impending change, and the uncertainty associated with it, can act as yet another cause for angst, says Scott Bunker, talent practice leader at the human resources consulting firm Aon Hewitt.

"In times of change in organizations, when people don't have information, they will go to others to try and piece it together," he said. "So usually you'll find that the amount of internal discussion and water cooler chats start to be heightened during periods of uncertainty. People are trying to understand what it means for them."

Dr. Schweitzer agreed that, even for senior managers, anxiety can well up when they are making decisions in "novel situations with the potential for adverse outcomes."

That is not say anxiety cannot be bested. "There are things we can do specifically to make us more confident and mitigate the harmful effects of anxiety," he said. The more self-confidence a person has, the less anxiety matters.

"If you're running a company, you want your top managers to be confident," he said, "not overly confident, but comfortable. And when they do feel anxious, to make sure that they are reaching out for help in the right places."

If someone feels even subconsciously apprehensive about having to make a presentation to a roomful of people, for example, he or she "can counteract that by being confident and secure, so practising really matters," he said. "Dress rehearsals matter. If you have to give an important speech, you want to practice it and in front of other people."

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Clarity around the company's vision is also important, said Mr. Bunker. "Providing common-sense explanations in simple terms why changes are being made and how it impacts the different stakeholders will influence people through change," he said. "So leadership, visible leadership, is absolutely critical."

Any business, experts point out, can suffer from anxious staff. "Companies that are putting a lot of pressure on people for performance would probably heighten the anxiety level," said Dr. Burke. "If you feel that you're under the gun, or working so that your energy level gets drained, you're more likely to not only be anxious but to respond in ways that are counter-productive."

Creating a workplace "where work gets done but people have fun would lower the anxiety level and result in better relationships and less competition," he added, "less impulsive decision-making."

Employers should also instill what Mr. Bunker called "an institutional ability to listen to employees. So when you think of change, to listen to employees and involve them, giving them the opportunity to actually influence and shape the changes that the organization is pursuing."

"I don't think we can solve anxiety," said Dr. Schweitzer. "People will always feel anxiety, even in a warm and nurturing work environment. What we need to do is figure out better ways to recognize that we feel anxiety, and to make sure that when we do, we are not relying on other peoples' recommendations too heavily, and to make decisions in a considered way."

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