How anxiety affects CEO decision making

In a Harvard Business Review article, Professor of Management Luis Gomez-Mejia and his research team reported on the impact of anxiety on decision-making.

Many of us experience anxiety at some point in our lives, and top executives are no exception. Professor of Management Luis Gomez-Mejia and his research partners interviewed 84 CEOs and other business leaders to find out how anxiety affects their decision-making, and how they handle it. From Harvard Business Review , July 19, 2016:

“We found that more-anxious leaders (those that were described as experiencing job anxiety “to some extent,” “to a considerable extent,” or “to a great extent”) took fewer strategic risks than their less anxious peers in order to avoid potential losses. Job anxiety reduced the attractiveness of big strategic bets for the company, despite their potential to drive large gains. “This isn’t necessarily a bad thing, as excessive risks can lead companies into ruin (Exhibit A: the subprime mortgage crisis). But smart risks are often key to driving corporate growth, and our results suggest that anxious executives may, in their overriding desire to avoid threats, miss out on high-upside strategic opportunities and thus limit growth.”

About Luis Gomez-Mejia