That gut feeling

Have you ever had situations where you could not explain why you did something but just felt that it was the right thing to do? Do you have those gut-feelings, sixth sense, or that inexplicable direction from the cosmos that tells you what to do? That’s intuition. Top leaders often boast of having this extraordinary skill.
Be it the strategic questions such as which markets to enter, what products to launch, which people to put in leadership positions, or those related to daily operations such as how much inventory to keep – business research and analytics is in constant drive to find ways to improve decision making abilities.
One way to avoid ad-hoc idiosyncratic decisions is to create accountability. That is, when we know that we are being watched and would be answerable to those around us, we feel an additional sense of responsibility. This can clearly be seen in social situations such as moral dilemmas where short-term, hedonic, and self-serving benefits collide with what is right according to one’s principles or what is in the interest of the larger good. One could think of nepotism or bribery as classic examples. Similarly, knowing that one is under the observational lens of others can lead to a greater commitment to one’s word, goals, and resolutions. Having to offer an explanation makes people think twice.
Ironically, this same tactic of accountability can backfire in many instances. In order to avoid confrontation or conflict, a rather simple thing to do is to make decisions that are easily justifiable. For example, going with what everyone else around says or does even when the decision results in a disaster easily brings legitimacy to one’s decision. People also use this to bring comfort to themselves in case of poor results with ‘at least, I did what was justifiable at that moment’.
Now, imagine the case of security officers at the airport who keep a watch on passengers possibly carrying drugs in and out of the country. Most often, these highly trained folks catch their targets with just a quick glance at them. If you ask them to explain how they knew this information, they cannot explain. In one anecdote I heard, the officer said “I am usually looking for someone who is looking for me”. Furthermore, imagine that the courts of law require officers to give proper explanations on how and why they thought that the passenger could have been a criminal (which is in fact true of many countries). In such situations, the officers could end up becoming reluctant to catch criminals. Or if they wanted to continue do their jobs well and still be asked for explanations, they could start creating rationalizations ex-post.
Such kinds of situations can lead to “defensive decision making” and a culture that is not tolerant to errors. The constant need to explain one’s feelings in words can lead to blunting of the ‘intuition signals’ of the brain. It can lead to choosing second-best options so that one is guaranteed not getting into trouble when things go wrong. I recently had a conversation with Professor Gerd Gigerenzer from the prestigious Max Planck Institute on Bounded Rationality (also the author of Risk Savy) on the topic. He highlighted his own research and several examples of such behavior. In one study, on asking business leaders about how often they followed their own intuition, 50% did so. However, the same managers feared admitting this in public. In fact, leaders regularly ask their analysts to produce tons of data without knowing its immediate use just in case someone asks for the rationale at a later stage. They hire consultants to hear what they already knew. With the advent of big data and predictive analytics, this issue has become even more serious – with precious time, energy, and money being diverted to creating a defensive plan.  He even makes the case that doctors prescribe unnecessary screenings and tests just to save themselves later on.
Errors and failures are part of individual learning and our collective evolution. Good intuition is not something one is born with; rather it can be honed with experience. And in the process errors would be made. Instead of shrugging them under the carpet, a culture that allows open acceptance of failures and sharing of collective learnings is what would help.
In a world of increasing uncertainty, not everything can be left to models and data. No doubt, data analytics is becoming extremely sophisticated and useful in addressing major business and social problems. At the same time, the decision of when to listen to one’s intuition, when to use models, when to get a second opinion, and when not to add to confusion by listening to too many points of view also needs intuitive thinking.
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