Gut Decisions

“Although about half of professional decisions in large companies are gut decisions, it would probably not go over well if a manager publicly admitted, I had a hunch. In our society, intuition is suspicious. For that reason, managers typically hide their intuitions or have even stopped listening to them,” Gerd Gigerenzer writes in Risk Savvy.

 

The human mind evolved first in small tribal bands trying to survive in a dangerous world. As our tribes grew, our minds evolved to become more politically savvy, learning to intuitively hide our selfish ambitions and appear honest and altruistic. This pushed our brains toward more complex activity, which took place outside our direct consciousness, hiding in gut feelings and intuitions. Today however, we don’t trust those intuitions and gut decisions, even though they never left us.

 

We do have good reason to discount intuitions. Our minds did not evolve to serve us perfectly in a complex, data rich world full of uncertainty. Our brains are plagued by motivated reasoning, biases, and cognitive limitations. Making gut decisions can lead us vulnerable to these mental challenges, leading us to distrust our intuitions.

 

However, this doesn’t mean we have escaped gut decisions. Gerd Gigerenzer thinks that is actually a good thing, especially if we have developed years of insight and expertise through practice and real life training. What Gigerenzer argues is that we still make many gut decisions in areas as diverse as vacation planning, daily exercise, and corporate strategies. We just don’t admit we are making decisions based on intuition rather than careful statistical analysis. Taking it a step further, Gigerezner suggests that most of the time we make a decision at a gut level, and produce reasons after the fact.” We rationalize and use motivated reasoning to explain why we made a decision and we try to deceive ourselves to believe that we always intended to do the rational calculation first, and that we really hadn’t made up our mind until after we had done so.

 

Gigerenzer suggests that we acknowledge our gut decisions. Ignoring them and pretending they are not influential wastes our time and costs us money. An executive may have an intuitive sense of what to do in terms of a business decision, but may be reluctant to say they made a decision based on intuition. Instead, they spend time doing an analysis that didn’t need to be done. They create reasons to support their decision after the fact, again wasting time and energy that could go into implementing the decision that has already been made. Or an executive may bring in a consulting firm, hoping the firm will come up with the same answer that they got from their gut. Time and money are both wasted, and the decision-making and action-taking structures of the individual and organization are gummed up unnecessarily. Acknowledging gut decisions and moving forward more quickly, Gigerenzer seems to suggest, is better than rationalizing and finding support for gut decisions after the fact.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.