Recently I have been reading about the impact of psychology on business. I am amazed at the effect it has on business and how critical it is to know. In this essay I shall write about the basics of our human mind and what influences it to do what it does.
- Perception
If you have read a lot of stoic literature you would know how important our perception is. Marcus Aurelies often asks us, the reader, to change our perception of things. It is true that we do things because of how we perceive the world. We do what we do because we look at things in a certain way. Let’s take an example of an ambitious employee and an employee who has achieved everything he has to in life.
The ambitious employee will do his best to achieve his ambitions and be a hardworking employee. On the other hand, the employee who thinks he has everything in life may take things easy on his job and may not work as hard at what he does.
But our perception depends on reference levels which is the next point.
- Reference level
Our perception is like a thermostat. Once something falls above or below a range our body takes action. We refer to this range as our reference level. There’s a setpoint and a range.
- Setpoint
The setpoint is just like a thermostat. If the temperature exceeds a certain temperature the thermostat acts to bring the temperature back to normal.
- Range
As for a range, it is like two setpoints. If it is in between two setpoints its okay but if it exceeds or falls below then we need to take action.
- Guiding structure
The guiding structure is more or less the environment that influences us and our behaviours. Our guiding structure consists of our family, residence, and society. It is shaped by the values, beliefs, and expectations given to us, and it affects our decisions, actions, and thoughts.
A river is shaped by its surroundings, and that is how it flows. We too are like a river. So what do we do if we want to change our behaviour? We change the environment that influences that behaviour.
If you research how to focus more on what you are doing, you will learn that most resources will tell you to remove distractions nearby you.
Now that you know these, you will have more control over yourself and also understand your employees and how to make them work. This is also as useful in real life as it is in business and I hope you will find it useful.
I got all these ideas by reading the “Personal MBA” book by Josh Kauffman.