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Intuition

Intuition vs Analytics: Should You Trust Your Gut?

Become a stronger business leader with 8 tips to develop your intuition.

If you’re a business leader, there are countless decisions to make, such as when to open an office, test a technology, create a program, hire employees, devolve an existing product, etc. From small choices to company-altering ones, you have to determine the best way to proceed. So, how do you decide, how to decide?

My role as an operations leader involves establishing measurable targets and tracking progress against those goals. It’s a world of KPIs and EBITDA. Yet, if I used data to inform every decision, the company would move forward at a glacial space and become irrelevant. I’m always weighing when to trust my gut and when to do the analysis. This article explores what the experts believe is the right balance and provides tips to trust and develop your intuition. 

Instinct Over Consensus

Sunny Bonnel is the co-founder of the branding agency, Motto. She has spent a decade of her career studying what makes leaders—from Elon Musk to Malala Yousafzai—extraordinary. She calls these individuals a ‘Rare Breed’ because they “don’t think, act, or communicate like the rest. They are the change-makers, rule breakers, rebels, the wild ones, and the ones who do things differently.” In her Inc. article, 6 Uncommon Virtues That Make Great Leaders a Rare Breed, she lists six unconventional leadership traits with virtue #3 being: “Obey Your Instincts.” She claims that leaders are taught to rely on research and data, and seek consensus to make judicious decisions. Yet, she believes these are “flawed measurements of the way forward.” Instead, she thinks that you need to tap into your inner wisdom and trust yourself in order to be a rare breed.

In another article, 4 Leaders Who Won by Following Their Instincts (Despite Being Told They Were Crazy), Sunny overviews how four intrepid business leaders (Adam Werbach, Henry Ford, Bill Allen, and Travis Kalanick) found success. Sunny believes much of their triumphs are because they pushed boundaries. She goes on to say that when you’re challenging conventional wisdom and critics say “you’re crazy,” this is one of the most telling predictors that you’re on the right path. As Sunny notes, “innovation doesn’t happen by committee.”

Intuition: The Product of Experience

Malcolm Gladwell, the author who researches trends, fads, subcultures, bias, consumer behavior and human psychology, has some insight on the topic of whether or not you should trust your gut. In Blink: The Power of Thinking Without ThinkingGladwell explores the subject of “thin-slicing” — the tendency to make snap judgments in the blink of an eye. He delves into the propensity of humans to use limited information to arrive at conclusions. He posits that, often, spontaneous decisions, or intuitive judgments, are more sound and successful than carefully considered ones because intuitive judgment seems to have access to knowledge that is not always (or readily) consciously available. One of the compelling examples in the book is that of an accomplished firefighter who was battling a massive blaze and instinctively knew he needed to immediately get his men out. Seconds later, the floor collapsed due to previously unseen flames in the basement. While the firefighter first attributed his snap decision to ESP, he later realized that his brain responded to cues (elements of the fire) of which he wasn’t aware on a conscious level. 

Gladwell also offers that, in this age of information overload, sometimes having too much data can interfere with a conclusion’s accuracy. He suggests that experts often make better decisions with snap judgments than they do with volumes of data due to analysis paralysis. The key is to sift through the mountain of metrics to identify the most critical data. Gladwell suggests that collecting more information, in most cases, may reinforce our judgment but doesn’t necessarily help us make a more accurate decision. 

That said, Gladwell cautions people to be self-aware when making quick decisions and forming opinions without a wealth of information because we’re often corrupted by our likes, dislikes, prejudices and stereotypes—our unconscious biases.

Here, with this idea of self-awareness as a ‘checks and balances’ to intuition, we begin to have the first cracks in the idea we should all strive to be ‘Rare Breeds’ and follow our gut instinct, come what may.

Trusting Your Own Data and Algorithms 

Chip Wilson, the founder of Lululemon, similarly thinks that our data-driven world has programmed us to look for the answers to life’s most significant decisions via algorithms. In his Forbes article, Trusting Your Gut Is The Best Business Tool You’ve Got — If You Can Listen, Wilson contends that we have a “cultural bias toward quantifiable data” and “it can be tricky to trust decisions made based on your body’s own process for interpreting the information around you: your gut.” He suggests that intuition is actually the algorithms of your body synthesizing millions of data points each day. 

Wilson has learned to trust his intuition. He describes numerous examples, during his formative years, when the “tightening in the pit of my stomach” telegraphed to him that something was amiss, yet he ignored it, much to his chagrin. Wilson believes that, based on millions of years of evolution, your gut will signal danger and, if you listen to it, you can identify pitfalls well in advance of your rational mind. Though he cautions that, for leaders, it’s not enough to trust your gut, “you have to make a business case for why others should trust it, as well.” He calls it “backing up your body’s “big data” with more traditionally accepted analytics.” 

Here, as with Gladwell, we see that Wilson isn’t advocating a swashbuckling attitude towards intuition—rather, it’s a measured approach with a big picture point of view. 

The Continued Rise of Analytics

Analytics, data and statistics are nothing new, of course, but they are certainly growing in influence in almost every aspect of life, not only business. In his article, Four Steps to Measuring What Matters in the Harvard Business Review, Michael J. Mauboussin compares the need to rely on the proper metrics in business to the booming analytics revolution of modern sports. Like sports franchises, companies have an immense amount of data and statistics at their disposal, but the key is to use the right ones. Many executives still rely on, not only, intuition and instinct but also outmoded and outdated metrics. Mauboussin explains, “The statistics that companies use most often to track and communicate performance include financial measures, such as sales and earnings per share growth. Yet these have only a flimsy connection to the objective of creating shareholder value.”

In the past, this may have seemed to work (emphasis on ‘seemed’) as everyone was doing the same thing; namely clinging to “these metrics because they are overconfident in their intuition, they misattribute the causes of events, and they do not escape the pull of the status quo.” 

Now, however, with the onslaught of analytics and data, using the proper metrics is becoming more and more necessary and, just like in sports, “identifying and exploiting them before rivals do will be the key to seizing advantage.” 

There Will Always Be Intuition

Where does this leave us? Gut instinct has been crucial to so many successful people that it feels foolish to write it off to attempt a purely analytical approach. On the other hand, ignoring analytics or the committee’s resources when they are available feels equally unwise. It seems that relying on intuition vs. analytics or a committee-based decision is a balance that depends upon your experience, knowledge and confidence in the subject matter at hand. If you are anywhere from proficient in the material to an expert, then let your expertise shine through and listen to what your instincts tell you, weighing other factors more heavily the further away from an expert you are. If you are even less knowledgeable, a wise decision is likely much more weighted with other means, such as analytics and tapping into the wisdom of those with more experience in the matter. 

In his article, Intuition Isn’t Just about Trusting your Gut, Modesto Maidique discusses decisions made by three extremely successful CEOs, Mickey Arison, Steve Appleton and Ray Strata, when they each made decisions in which they were experts and relied on intuition: “In each of these cases, intuition worked. All three were experts in their field; all three decisions were wildly successful. When these three superb decision-makers delved into an area outside their expertise or where they were not yet experts, however, their “intuition” failed them.”

From this, we can see that good decision making and strong intuition aren’t something that one has or doesn’t have; it’s more a function of experience and, of course, being knowledgeable and honest with yourself regarding your experience levels.

Regardless of the way we weigh instinct vs. analytics, Maidique makes some excellent points, and I agree that we should always be asking ourselves if we are using the right metrics to supplement our instinctive decision making.

One central point to consider, however, is that no matter where you come out on this debate—from pure gut intuition-style to rational analytical-style decision-making—there can be little doubt that you can never be completely free from instinctive problem-solving. At some level, every decision is likely influenced by, or contains some measure of intuition. After all, we are human. Given that, it might be wise to add your inner voice to your leadership tool kit, start listening to it, and start developing it. 

Tips to Develop Your Business Intuition

Culled from the experts mentioned above in this space, as well as from additional research and my own experience, I’ve compiled a guide to help you hone your intuitive skills:

  1. Develop Your Inner Compass: Take time to reflect on divisive topics to develop your point of view on these contentious matters that, as a business leader, you may need to face in the future during your career.
  2. Seek Solitude: Nurture your intuition through seclusion. Being alone will allow you to cultivate your decision-making power without outside influences.
  3. Create a Roster of Trusted Advisors: Temper the fear and human biases that can cloud judgment by assembling a network of impartial people in various areas, especially those where you don’t have the expertise, who will give you unvarnished, honest perspectives.
  4. Be Open: Embrace the concept of trusting your gut. This is half of the battle; after all, how can your instinct guide you when you don’t trust or listen to it?
  5. Be Mindful: Practice meditation to help tap into your intuition and understand the signals your gut is sending you.
  6. Journal: Keep track of when you believe your gut is telling you something so you can reflect at a later date to see if your intuition was accurate and understand how you responded. No judgment in this exercise, just observation.
  7. Reflect, Then Act: Recognize that your senses can be fallible. If time permits, allow ideas to settle. Take a beat to fully explore how you feel about essential decisions before making a move if you have the luxury of time. 
  8. Be Receptive To Change: Realize that an opinion you form today can evolve based on new information. Just because you made a judgment at one point in time doesn’t mean that you can’t change your mind. To grow is to be human!

 

 

 

 

Amber Bezahler

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