Is economics a heartless topic? And, are economists really a heartless bunch? Or is that just a characteristic of business and commerce? As a naive, young, economics student I was often confronted with the thought that commerce students were only after $s and had no heart. Many of those confronting me were sceptical arts students. They would invariably profess their allegiance to cerebral matters over those of the almighty $, Yen and/or Deutschemark (as it was then).

Operating in such an environment it was not surprising that I, perhaps naively, felt the need to be apologetic in my career choice. For example, I would often qualify my description of a respected friend and mentor with the phrase “his heart was in the right place”. Once this prompted the response, “what you really mean is his heart is on the left, but his wallet is on the right”. And this just reinforced my internal battle to justify my career choice and profession.

Of course, being now somewhat older and, perhaps, a tad wiser, I’m not at all apologetic. In contrast though, some in the commercial field see no role for more cerebral matters. Their raison d’être is, indeed, the almighty $. All else is seen as ‘soft’ and waved away with suitably derogatory comments.

But for most of us, where life is not so black and white, battles between affairs of the heart and decisions of the head are ever present.

So, in a true battle between the heart and the head, what would (or should) you follow? Does your commerce training, or business outlook, really mean you should always follow your head?  Or does the heart have a role to play? And, as they say in parliament: “if so, why, and if not, why not?”

I would suggest that the results of some such conflicts have littered our past. Various business forays into Australia could be put in this basket. For example, there was the Warehouse expansion into Australia, and then there was Air New Zealand and its association with Ansett Australia. Meanwhile Telecom’s Australian ventures continue to yield mixed results. But, how are any of these related to a battle between heart and head?

Most of these decisions (and many similar to them) would have been entirely plausible at the time. The numbers would have stacked up. The head would have had no issue with venturing into our closest neighbour, with opportunities to access a much larger market and improve shareholder returns.

But what would the heart have said? How did these ventures fit with the raison d’être (or ‘softer’ side) of the organisation or company? Come to think of it, was the heart even consulted?

I’m not suggesting that the heart would, necessarily, have said no to these ventures. Rather, I’m questioning whether these ventures were sufficiently closely aligned to the wider aspirations of the company.

Perhaps an easier framework for some is to think about short-term objectives versus long-term goals. When short-term actions and gains do not conflict with longer-term goals there is no quandary. That is, when both the heart and the head say yes there’s no problem. And if they both say no, again, decisions are not too difficult to reach.

Of course, the prospect of lucrative short-term benefits which are outweighed by costs over the longer-term may see temptation get the better of us. While the head might say yes in this instance, it should really be the heart that is followed – as would be the result of any dispassionate benefits-to-costs assessment.

But, as in love and war, it is when the head says no but the heart says yes that anguish is the most acute. The promise of attractive benefits accruing in some distant longer term often comes associated with weighty, and very real, costs in the immediate short term. These are unenviable situations, requiring tough and courageous decisions. The phrase leadership takes on its true meaning here.

In the ideal world, the longer-term benefits should be dispassionately measured. In cases where these measured benefits exceed the short-term costs, such benefits should be sought. And that’s the textbook answer. But arguing, again, that the heart takes precedence over the head requires leadership and courage. Especially if one is confronted with those not schooled in the finer points of business and commerce.

And what about the consumer end of the decision-making tree? The parallel here is the age-old quality versus price dilemma. Yes, we all know we should purchase quality products. However, when that obscurely-branded gadget promises to do exactly what you want for half the price of the reputable brand, just what do you do? Yes, you know deep in your heart that the reputable brand will come with an impressive track record and a guarantee, with readily available parts for repair (although, if it is so good, it won’t need these), not to mention the promise of a longer life before it becomes redundant. But sometimes the half-price offer makes the head’s decision all that easier to follow.

So, left to the head on its own, decisions can well follow a narrow track. This leaves little room to ensure choices fit with the organisation’s raison d’être. If the heart is not there, the risk of later regret is higher. In cases, this may explain some of New Zealand companies’ ventures across the Tasman being less than successful. Alternatively, perhaps the need is to ensure ventures, whether to Australia or beyond, are seen as being closely aligned to our aspirations. In the absence of such alignment, we risk a passionless, plodding pursuit of not much more than someone’s bottom line.

The sporting analogy suggests a coach who concentrates on technical expertise through all training sessions. The paper assessments will no doubt install such a team as favourites in any competition. But how many times have we heard the phrase ‘we were out-passioned’?

Yes, the head’s dispassionate assessment of costs and benefits is required and necessary. But if the rationale for entering the fray can not be pinpointed, then perhaps that is a sign that the heart isn’t in it. And, as in all walks of life, if the heart isn’t in it the risk of failure is all the more real.