Most organizations are striving to become more analytical. This is generally a good thing. However, when I hear vendors and practitioners blindly parroting cliches like, “No more gut feel decisions” – it makes me cringe.
“Gut feel” decision making has its place – even in business settings. There I said it. And here is why:
Long before humans started deductive & logical reasoning, analysis of probabilities, statistical and other data-driven decision making approaches, we were using “gut feel” approaches to help us survive. Techniques like intuition, mental simulations, metaphors and storytelling drove decision making. While it is true that such techniques are more applicable to a natural and perhaps primitive setting, they are a part of our evolutionary legacy. We are hardwired to make gut feel decisions! It is our default approach. No amount of training or help from computers is going to change that.
Wouldn’t it be more prudent to understand and leverage what we are already hardwired to do? Gary Klein’s book, Sources of Power, is a good resource for studying such type of “Naturalistic decision making”.
In his book, Analytics at Work, author Tom Davenport, a huge advocate for analytics, talks about areas where analytical approaches are not practical . Here is a brief list:
When there time pressure: For e.g. a firefighter has no time to be data driven. Intuition and experience are key.
When there is no precedent: It’s hard to collect data for something that has never been done before.
When history is misleading: There are some unusual times when the past is not a good indicator of the present. Nassim Nicholas Taleb talks about “black swans” – the highly improbably or unpredictable events.
When the decision maker has considerable experience or expertise: People with greater expertise see the world differently. They have a larger storehouse of procedures to apply. More analogies to draw upon. They notice problems more quickly. They have richer mental simulations to use in diagnosing problems and evaluating courses of action.
When the variables cant be measured: Sometimes the key variables are hard to measure. Often variables may be hidden, ignored or overlooked. An example would include finding a romantic match.
As we can see, intuition and gut feel decision making are applicable in many business and real world scenarios. However, when possible, make intuition the last resort and not the default option. Even in the circumstances listed above, it’s worth tracking what intuition was applied, the decisions made, and the results. Such tracking will help refine the process.