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Gut Checks Are Way Overrated

In today’s highly competitive, fast-paced, volatile work world,
employees are constantly being called upon to make decisions. Often,
almost instantly. As a result, today’s workers rely heavily upon their
intuition. There’s no doubt that intuitive thinking can be astonishingly
effective for decision making. Intuition, in fact, is often described
in almost mystical terms because of its contributions. Poker players
have a sixth sense, good mechanics just know, and ballet dancers feel
their steps. Examples like these lead most of us to believe that we can
rely completely upon our intuition in making most any kind of decision.

But truthfully, your gut is way overrated. Don’t trust it. As
Cambridge elite, Michael Schrage (MIT) puts it, your gut deserves
skeptical vigilance. Sorry, but your gut instinct and gut feelings will
betray you. Instead, the key to smart use of intuition is to follow
President Reagan’s rule for working with the Soviets: Trust, but verify, with a strong emphasis on “verify.”

What is intuition?

Gut feeling or intuition is a judgment that comes very fast when
we’re faced with a problem. We don’t know why we have this feeling. And
we don’t fully know where the insight comes from. It’s just
automatically there. Just something you know. Yet the feeling is strong
enough to cause us to act on it.

Research has shown that intuition is “rules of thumb,” a set of
patterns based on years of experience. When certain cues, based on old
“rules” or “patterns” are presented to us, intuition, gut-feel or
instinct flashes into the gray matter with resolutions.

If we lack experience in a subject, we won’t have those intuitive
insights. For example, I’m not a rocket scientist, so if you ask me
about rockets or flight problems, no flashes of insight will surface.
But in contrast, if you ask me about human behavior and coaching, which
I’ve studied and practiced for 50 years, I’ve got a lot of rules of
thumb–patterns that automatically flash to cues. Information and
solutions to a behavioral problem are often just there. But . . . I
still defer strongly to evidence.

Problems with intuition.

A huge body of systematic research tells us how intuition works, and also, how it doesn’t work.

  • Intuition takes years of experience and study to develop.
    Experience is the one differentiator for effective intuition. Research
    has shown that it takes approximately ten years to develop trusted
    intuition. Expert chess players typically have passed the 10,000 hour
    threshold of experience. That’s why I was so appreciative of one recent
    MBA grad who was hired as COO for an architectural client. The managing
    partner kept telling him to “go with his gut.” “I don’t have any gut
    insights (intuition) to go with,” he kept telling his boss. He lacked
    the experience for the development of useful management patterns and he
    was smart enough to know it.
  • Intuition only works well in environments that provide “valid” cues and rapid feedback.
    The environment must have a degree of regularity for a cue to be
    considered valid. Games such as bridge or poker are highly valid, while
    long term weather forecasting and stock trading lack validity. The huge
    scale of weather environments and stock environments and the lack of
    recognizable patterns in the two make intuitional judgments difficult,
    even impossible.
  • Intuition is fast, but reasoning is slow. This is
    obvious—but still very important. The rapidity of changes in today’s
    work environment makes intuition a highly rewarded skill. It’s
    seductive, leading us to ignore its weaknesses.
  • We apply intuition inconsistently. Even experts apply what they know inconsistently.
  • Our biases powerfully impact intuition, leading to bad judgments.
  • To quote MIT’s Andrew McAfee, we have lousy intuition about our intuition. There’s no way for us to tell whether a spontaneous idea is expert intuition or a dumb bias.

My conclusion from all this research and much more that I’ve looked
at is that intuition is dangerous territory. Once more . . . intuition
is vastly overrated and used far too often. Real experts seem to know
what they don’t know. But those lacking expertise (and they may not know
they lack expertise) certainly don’t know what they don’t know.
Subjective confidence is therefore a very unreliable indication of the
validity of our intuitive judgments and decisions.

So what works better than intuition?

There’s a terrific amount of evidence revealing that
systematically-collected data and mathematical models can outperform our
very human, intuitive judgments. A systematic analysis of 136 studies
that compared human to statistical (analytical or research-based)
judgments found that the preponderance of data favored the statistical
and systematic data approach to important decision making. Sixty-five of
the studies failed to find a significant difference between human
judgment and systematic prediction. Sixty-three of the studies found
that evidence-based (statistics, etc.) were significantly better
predictors of the case at hand. Only eight (yep, just eight) of the
studies found that people were better predictors. There’s a large
toolkit of statistical techniques that are actually designed to find
patterns in huge masses of data—even when it’s messy data. This makes it
possible to deliver “best guesses about cause-and-effect”
relationships. Quoting Andrew McAfee’s report, If you’re keeping score, that’s just under a 6% win rate for the people and their intuition and a 46% rate of clear losses.

How to control the quality of your decisions.

Although there are a large number of ways to vet any decision, I regularly start with four key questions.

  • Is my self-interest, or the self-interest of others driving this decision?
    No question that people can lie with statistics and most any kind of
    evidence and reasoning. Indeed, I’ve been told by my astute protégé that
    I’m exceptionally good at lining up data for my own objectives. He once
    commented with a smirk that I have a statistic for everything. I agreed
    with him on both. Still, if the decision is important to my thinking,
    my well-being or my future, I’m very cautious about the issues of
    self-interest. Self-interest can readily sabotage decision making. Like
    most people I can fall blindly in love with a decision—and miss the
    inherent problems.
  • Are there dissenting opinions on this issue? Are there
    other ways of looking at this decision, and does the team or colleagues
    dissent on their conclusions. Whatever. The absence of dissension on a
    complex issue is a red flag. It’s nearly impossible for four or five
    people to agree on a complex issue.
  • Have credible alternatives been considered? That’s usually
    my first thought. It sounds like this: How else can we look at this
    problem? Am I thinking about it the best way? What alternative data have
    we missed?
  • If I had to make this decision again in a year, what info would I want and how can I get more of it now?
    I’ve just begun to look at this question and found that it can be
    exceptionally useful. My intuitive mind readily constructs a story based
    on the evidence at hand. But asking this question gives me a bit more
    light.

So what’s in it for you to revise your thinking about intuition and set it aside 95% of the time?

As a result of a more evidence-based focus, I’ve found that my
decision batting average has gone up significantly. As a coach and
mentor, evidence-based thinking has given me far better insights for
working with clients and helping them to resolve their issues. In
addition, as I’ve gradually become more and more familiar with
evidence-based thinking, I’m a much more critical and intelligent
recipient of political and economic comment. Politics aside, Reagan
really was very accurate in his approach to decision making: Trust, but
verify. I’d put it more strongly. If the decision is significant, put
95% of your input into verification.

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