Stressed Leaders Make Poor Decisions – And It’s Costing Australian Small Businesses

Many Australian small business owners believe they’re handling stress just fine – until it’s too late. According to crisis expert Gary Fahey, unrecognised stress is quietly eroding decision-making across workplaces, leading to poor hires, financial mistakes, and reputational risks.

“When you are constantly operating in a state of stress, your judgment is compromised,” says Fahey. “You react instead of reflect. You agree to things you can’t deliver. You make decisions based on emotion, not strategy.”

For small businesses, these missteps can have an outsized impact, from lost revenue to staff disengagement.

Common Stress-Driven Mistakes in Small Businesses

Fahey, who works with CEOs, founders, and high performers across Australia, highlights several tell-tale signs of stress-fuelled decisions:

• Saying yes when you should say no – Taking on too much out of fear or guilt leads to burnout.

• Avoiding tough conversations – Problems fester when leaders shy away from addressing issues.

• Rushed hiring – Stress pushes leaders to “fill the gap”, often leading to poor culture fits and underperformance.

• Emotional decisions over data – When overwhelmed, it’s easy to let frustration or fear drive choices, ignoring metrics and long-term goals.

• Micromanaging – Stress can lead leaders to control every detail, undermining trust and innovation.

“Trying to stay productive when you’re depleted results in errors, poor attention to detail, and careless mistakes,” Fahey warns.

Recovery is a Business Strategy

Fahey urges small business owners to shift from a crisis-response mindset to a culture of performance preparedness. This means prioritising mental health not as a luxury, but as a requirement for good leadership.

“You don’t make your best calls when you’re exhausted or anxious. When your brain is rested, your thinking sharpens, your perspective widens, and your emotional regulation improves,” he says.

For Australian SMEs navigating economic uncertainty, staying sharp is more important than ever. Fahey’s message is clear: Take the time to step back, reset, and recover – before your business pays the price.

The post Stressed Leaders Make Poor Decisions – And It’s Costing Australian Small Businesses appeared first on Small Business Connections.