What’s the Best Way to Make Careful Decisions?

James Heskett finds compelling arguments for a process involving intuition based on analysis and experience. Should people also make their own decision-making process more transparent to others and to themselves?
by James Heskett

Summing Up

What is the right mix between intuition and analysis? Several clear themes characterized responses to this month's column. Dominant among these was that the best way to reach a decision depends on a number of factors, including the nature of the decision, the nature of the decider, the information available, history, experience, the number of deciders, and so forth.

Nevertheless, several comments reflected an uneasy fondness for a good dose of intuition in the mix. Guy Gould-Davies' comment was particularly insightful: "The idea of using feeling in the context of decision making makes many people highly uncomfortable which is why intuition gets a bad rap. (It implies) … emotion … a lack of discipline and robustness in analysis … the lack of control (replicability)." Pallavi Marathe put it this way: "'Careful Decisions' is a paradox …. If there is past data available to help predict the future, it may be a good idea to refer to it. But in most cases, the decision maker is posed with a unique challenge." Vanitha Rangganathan, arguing for the role of intuition in the creative process, commented that "Experience makes us personally wiser …. 'Wisdom of crowds' breeds convenient conformity and creativity is often lost in the process."

At the other end of the intuition-analysis spectrum, R. C. Saxena opined, "I believe intuition ought not to play any part …. Sincere effort to harness all the collective wisdom coupled with a commitment to deliver the Complete Solution ought to be the key."

Most argued for a process involving intuition based on analysis and experience. Rowland Freeman commented, "A great deal depends on the magnitude of the decision…. The lesser the impact, go with experience and intuition." As Marlis K. put it, "… the question should not be rational decision making OR intuition, but rather … how to combine both." David Kendall said, "In the most difficult case of no-time and high-risk, reliance on 'rational intuition' may be a preferred way to minimize direct and/or collateral damage if the decision goes wrong." Luis X. B. Mourao opined that "… while (a model) helps to diligently collect and analyze relevant data, it only gets you so far. Add experience and it will get you a step further."

Some of the most interesting comments raised questions about whether we should instead concentrate on ways to make our own decision-making processes more transparent to others and to ourselves. Edward Hare put it this way: "Openness and honesty are the sunlight that's needed to make … decision making as effective and efficient as it ought to be …." This may require a certain amount of self-awareness. Maree Conway said that "Our worldview conditions what we accept and don't accept as real, and this conditions how we make decisions. Being aware of your worldview and biases is the first step to wise decision making …." Jeremy Stunt commented that "I have learned that it is helpful to host a 'conversation' between my rational/analytical side and my intuitive side." Phil Clark's advice provides a useful close: "If you are seeking the perfect solution, you likely are making no decisions and letting life pass you by. That may be the saddest decision anyone makes." What do you think?

Original Article

In his book Blink, discussed in this column in February 2005, Malcolm Gladwell advised us to place faith in intuition based on experience in deciding many things quickly. Now Michael Mauboussin, with his book Think Twice, makes the case for a more careful approach, suggesting that we place too much emphasis on intuition and personal experience as opposed to the "wisdom of crowds," mathematical models, and systematically-collected data. He argues that "blink" serves us well in stable environments where feedback from previous decisions is clear and where cause-and-effect relationships can be identified. Unfortunately, in his view these conditions are more and more rare. As he puts it, "intuition is losing relevance in an increasingly complex world … more is different." You ask, what's new here? Perhaps these sound like "dog bites man" assertions.

I'll risk oversimplifying a complex set of arguments this way: Mauboussin, citing a wide range of examples and research, argues that we use experts (as opposed to diverse "crowds") too frequently, that we too often fail to: identify the nature of the problem, match solution techniques with problems, seek diversity in our feedback, and use technology where possible.

Among other things, he argues, we ignore the subtle and ignored biases that our experiences impose on our independence as decision-makers, we decide too frequently on our emotional reactions to risk (playing the lottery even when we know better, for example), and we succumb to pressures to follow the group. As decision-makers, we are products of our environment to a greater degree than we realize. We take credit for things out of our control while blaming others for failure in similarly uncontrollable circumstances. We hire "stars," only to watch them burn out in a new and different managerial environment. We look for "best practice" (à la Jim Collins in Good to Great and others) in highly complex situations where there is little comparability and therefore no best practice, only "it all depends." Worse yet, we are often not conscious of these influences.

Mauboussin maintains that we too often underestimate the importance of luck in the outcomes of our decisions, employing Nobel Prize-winner Daniel Kahneman's observation that success requires some talent and some luck, while great success requires some talent and a lot of luck. The importance of this observation is that systems that involve significant amounts of luck, such as investing for many people, revert to the mean for the group over time, a fact that can be used to make better decisions without the influences described above. It's why, for example, some successful investors simply choose stocks of the bottom companies in the Dow Jones average in the preceding year in making their investments for the coming year.

Is intuition losing its relevance in an increasingly complex world? Will we need to turn increasingly to such things as quantitative models, "prediction markets" (where people bet on their views), the wisdom of crowds, and even such things as models based on "system dynamics" developed at MIT in the 1960s? And should we rely less on so-called "experts" and "stars"? In short, should we be spending more time examining our true decision-making abilities and the things that influence our results, i.e., more time "thinking twice" than "blinking"? What do you think?

To read more:

Michael J. Mauboussin, Think Twice: Harnessing the Power of Counterintuition, (Boston: HBS Press, 2009)

    • Anonymous
    Yes, follow your intuition always. If you noticed when you go against it, you made the wrong decision.
    • Ibrahim Almojel
    • PhD student, Stanford University
    In this complex world it is essential to put a structure on decision making. For complex decisions requiring large capital investments, system dynamics and decision analysis models and structures are essential. They are widely applied at energy and pharmaceutical companies. There is no reason why we can't adopt some of the structures on our everyday lives. A good reference is Decision analysis: practice and promise by RA Howard - Management science, 1988
    • Geoff
    • Community Advocate, Indicee
    Like you say, "it depends". Having a hard and fast rule whether to use intuition versus something else seems as perilous as either choice.

    What I like to do is look for external validation of my decisions over time in order to gauge my success or failure in understanding my environment. I don't attribute my success to skill per se. I only know when there appears to be validation of my decision. Anything more, as you allude to, is lost in a dizzying array of contingencies.
    And of course, when in doubt, consult The Art of War.
    • CJ Cullinane
    We all have a style of decision making that I think is very hard to change. We can use powerful decision models utilizing complex spreadsheets and a vast amount of input but often when we have to make a decision we throw the information out the window and go by our 'gut'.

    Maybe we are anchored to our past practices and decisions and refuse to see change. Maybe we make a decision based on what everybody else is doing (such as the investment banks) and that influence over comes our logic.

    Often we focus on the historical input knowing full well that this may not occur on a consistent basis. What are the powerful spreadsheet programs based on, history! With all out complex tools, such as Monte Carlo, Exponential Smoothing and programs like Excel and Crystal Ball we still have not improved our decision making process.

    I guess human nature is such that some of us will take risks and some of us will not. I believe that the decisions we all make are still based primarily on our experience and personalities and the new powerful decision making tools just push us to the extremes of risk and risk aversion.

    Charlie Cullinane
    • Garry G
    • Futurist/Strategist, Brooklyn, NY
    I don't know that it is letting go of intuition - as much as it is having the capacity to identity our assumptions and be honest in testing their relevance in major market transitions. It isn't intuition that has failed us- it is our untested (or out dated) assumptions against transitions that change fundamentals (e.g. Demographic implication on markets such as Aging Boomers tied to consumer spending; or new cost structures or organizational models based on networks/technology)

    Wisdom of Crowds sounds great- but the sample tends to fall to those engaged and wanting to share their insights!

    I think a combination of Situational Awareness (perception, comprehensive and projection) and Systems thinking (structure; feedback loops, et al) is the secret to success in the business climate of 2010-2030. So yes, a little less 'gut' but more transparent structures to our decision making models would make a difference! Thanks for the thoughtful post!

    • Dr. Kervokian
    • Managing Director, Kervokian Consulting
    I don't believe in luck but I do believe in risk and the mathematics of risk. Can we say that a successful punter having run through the numbers one is less luckier than another who runs on assumptions and faith?

    I also believe in experience. And also in the requirement to unlearn the experience in order to progress further. Having said that, we all have blink moments, and we have also made decisions that requires careful calculation.

    For example, would one just jump into any mortgage deal? Size up a range of brands for family sedans? Would a rich entrepreneur even bother going through specifications and ROI of selecting between a Rolls and a Bentley?

    Humbly, it's all situational, and emergent.

    • Anonymous
    It is of the utmost importance that before any careful decision is made that the decision maker first allows for at least a decent frame of "thought-break" to transpire beforehand. This simple, but important, exercise is routinely skipped and discounted, and this is unwarranted.

    The "thought-break" should include a genuine acknowledgement of the very fact that he/she is making the decision based on the "best efforts" and "best data sources" available at the time--an acknowledgement that the decision was not made in the vacuum. This split-second "mental gut check" made just before will strike courage within the decision maker that will then help him/her in facing the ultimate reverberating aftermath of the decision.

    We must never forget that it is our ability to 'reason' and our ability to 'rationalize' our decisions that make us unique among our sub-species. We strive to be beyond pure instincts and intuition in this complex world we live in; however, we must never forget that the counterpart of intuition is not "manna from heaven"--it too is contrived by humans. Thus, we must never abandon our intuition and instincts. Both of these are our best teachers in the practice of future course correction. For the general masses of the world, good instincts compensate for complex intellectual inadequacy--this is our bond, this is our communication connection to these people.

    No mathematical model will ever fully encapsulate human and market behavior. At the end of the day, it is about the relationships that leaders build with their people. The numbers need to be right, but it is our ability to build on relationships with others that drives deals, mergers, innovation, and progress. Our intuition is our common bond; it is our beacon and true light in this ever-growing complex world we live in.
    • M.E. Mann
    It seems odd that on one hand we would argue for using historic data to build decision models and on the other hand argue that we need to use decision models because the situation is changing from the past. Be that as it may, the risks associated with model building....unusual base data, untested algorithms and, often, the inability of the knowledgeable 'user' to understand which assumptions and factors used by the 'unknowing/separated' programmer (therefore what is missing from the model that must be made up by professional judgement) make me think that it is at best a tool of overall decision making rather than the means.
    • Dorit Geifman
    • PhD student, University of Haifa
    In his book Outliers, Gladwell points out that you also need to be in the right place at the right time.
    • Stefan Mititelu
    • Senior Consultant, Network Fortius LLC
    It's all in the mathematics - we just need to work on the right model(s) for every application ...
    • Anonymous
    Nature fools everybody, regardless of skills, experience, wealth, or position. Furthermore, decision-making is just as much an act of physics as it is management. "For every action there is an opposing reaction".

    It takes insight, skill, and natural "luck" at a unique point in time to create the extraordinary. Sometimes simplicity is clouded by complexity. "Why didn't I think of it".
    • Rowland Freeman
    • retired
    A great deal depends on the magnitude of the decision. The hard ones with major impact require some modeling, discussion, and analysis as the results can be serious. The lessor the impact, go with experience and intuition. However, I discourage in counseling having any dependance on luck, as that is just Las Vegas gambling, and the odds are against you.
    • Sairam Tadigadapa
    • The Hartford
    It really depends on the issue at hand. When the issue is hiring a person for a new position, I think gut feel plays a role beyond looking at basic qualifications. If the issue is launching a new product, it will be foolish to do so just based on intuition. It should be backed by proper market research and analysis.
    • Steve LaValle
    • Partner, IBM Global Business Consulting
    Two research-based whitepapers from IBM Institute of Business Value that discuss this topic:

    1 - Business Analytics and Optimization for the Intelligent Enterprise.

    2 - Breaking Away with Business Analytics and Optimization.

    Both studies compare top and lower performers in use of analytics.
    First study reviews gaps in mgmt decision making and set a framework.
    Second describes degree to which characteristics vary among performers.


    Several interesting cases linked at bottom.

    • Marlis K.
    • consultant/researcher, IFE (France)
    Intuition can be educated through experience plus reflection.

    It also needs a sort of inner silence. otherwise we might take our wishful thinking for intuition.
    So it all depends on whose intuition and how he or she handles it.

    Anyway: the question should not be rational decision making OR intuition, but rather in what case privilege the one or the other or how to combine both. If we didn't rely on intuition for most of our current decisions, we would break down with fatigue anyway. Intuition is experience-based to a great extent.
    • Dan Erwin
    • principal, Erwin Group
    With a 40 year backlog of experiences in my niche, I automatically have intuitions about people problems in organizations. However, when I finished my PhD dissertation in 1984, I found that intuition, my inherent style, gets me into a lot of trouble. Since then I've become very familiar with Kahneman, Tversky, along with Bazerman's work on bias. As a general rule, if a problem is significant, I'll have an intuitive feel for it. But I nearly always refuse to trust my intuition. So I go for data and research, and have built a reputation for unique expertise in exec and managerial development. Clients know and expect me to scrutinize their mental model and ideas. That puts a quick end to a lot of intuition.

    The most intriguing experience I've ever had was with a recent MBA who was hired as COO at a good-sized architecture firm. Not an architect, but with contracting experience, the CEO was always telling him to "go with your gut." He told me on numerous occasions that he argued with the CEO, telling him that he had no gut feelings because he lacked the experience of a COO. I thought he was brilliantly correct.

    Intriguing that Leonard and Swaps view intution as merely a form of pattern thinking, built upon a long experience of practice. I suspect they're right.

    However, as Mauboussin points out, intuition only works well in stable environments. I'm not certain I'd recognize a stable environment if I saw it walking down the street--at least not in the 21st century.

    Though I'm exceedingly intuitive, I deeply mistrust my intuition. As my MD, PhD son-in-law says, that makes for a great research opportunity.

    • James Dittmar
    • Professor, Geneva College
    In addition to the intuition vs mathematical models as a basis for decision making, it's important to consider the effect of heuristics, as Max Bazerman and others have written, in terms of how these cognitive biases influence the way in which we gather, analyze and interpret data. Intuition, no matter how savvy, and mathematical models, no matter how sophisticated, cannot work effectively, if the data one has and the way that data is considered, is flawed.
    • Gerald Nanninga
    • VP, Retail Ventures, Inc.
    Quant jocks have attempted to create a religion where we abandon logic/intuition and put our faith in the almighty model. The problems with these models are that:

    1) The inputs are based on assumptions or history.
    2) The outpusts are based on mathematical relationships which are based on another set of assumptions or historical relationships.

    If history is no longer a good guide, and if the rest are assumptions which come from our heads, we really haven't advanced much by moving from human thinking to mathermatical models.

    The benefit of models is that it forces us to consciously wrestle with all of our assumptions. This is a good discipline, whether you use models or not.

    The great flaw in modeling is the detatchment from reality...it is just a pile of numbers that are blindly taken out of a black box. As an econometrics professor once told me, if you could make a model complex enough to accurately forecast the economy, the model would be so complex that you would not understand the model any more than you would understand the economy. And that lack of understanding leads back to just faith. And we have seen what blind faith in models lead to in the mortgage business--a global economic melt-down.

    The problem with crowsourcing is that it is good for reacting to past experiences, but poor in predicting future behavior for which there is no experience. In other words, it is a good way to validate a test, but not a good way to determine what to test.

    Regarding intuition, I think intuition works best when applied against "root cause" rather than recent history. For example, consumers tend to act in ways which reinforce their sense of self worth (a root cause of action). Therefore, make decisions in the direction which improves that sense of self-worth (regardless of recent history). Of course, intuition is needed to help determine how much you think a decision would impact self-worth.

    Although many tools can and should be brought to bear on decision-making, I believe that Intuition linked to root cause knowledge/understanding is one of your best decision-making tools.
    • David Kendall
    • Field Agent, Agriculture Extension/NCSU A&T
    The extent of an inventory/analysis of considerations for a decision should include an assessment of the risk of failure and its impacts if the decision is not successful and the time/resources available for making the decision. For example: in low-risk/low impact decisions; knowledge, understanding and wisdom i.e. intuition may be adequate as well for decisions with short time fuses. For high impact/high risk decisions associated with high personal liability, the decision comes closer to necessitate a legally defensible and documented pathway. In the most difficult case of no-time and high-risk, reliance on "rational intuition" may be a preferred way to minimize direct and/or collateral damage if the decision goes wrong.

    In the end, we all must consider our own personal responsibility for the outcome of a decision and the ethics associated with weighing consequences of success and failure.

    Luck CAN play a role if you buy the following axiom:
    "Luck Happens when Preparation meets Opportunity."
    • Phil Clark
    • Clark & Associates
    I have been providing seminars on making decisions for years, mainly focusing on crisis events. Here are some things I see that impacts decisions more than anything.

    1. We do not learn from our mistakes. If we really did, why would man still be fighting wars, having economic recessions, and filling prisons? Where were the experts to stop us making the decisions that lead us into our crisis?

    2. There is an old saying that "We can never step into the same river twice." Some say that is foolish. "I can step into the Missouri or Mississippi as many time as I want." Therein they are missing the point. You can never step into the same environment since the water you stepped into the last time has long moved on. We often fool ourselves thinking that we have seen this situation before and our experience will help us make a sound decision. Circumstances change constantly, be sure to evaluate each challenge anew.

    3. Decision making is not an exact science. Thinking so only places us at a disadvantage.

    4. Once we make a decision, the world moves on and we must make new decisions. Too often we stick with old decisions failing to realize their time has passed.

    Making decisions are part of life, albeit and imperfect part. If you are seeking the perfect solution, you likely are making no decisions and letting life pass you by. That may be the saddest decision anyone makes.

    If only we had enough wisdom to make enough good decisions that we would not bring harm and hardship to others.
    • David Cawlfield
    • Principal Engineer, Olin Corporation
    I appreciate Jim's wise council on balanced decision-making, and the multitude of methods available for our use.

    While my tendency is to rely heavily on modeling and engineering skills to evaluate ideas, intuition plays a very important role in my thought process too. A part of my belief system is that acknowledging the existance of a higher power is essential to both ethical choice and creative thought. Seeking new ideas from God's perspective is the ultimate way to think "outside the box."

    Taking this approach to decision making also helps us to question those elements of "blink" decisions that should be reevaluated and modified before putting them into action. One needn't have a belief in a personal deity or profess religious belief to benefit from this concept: that extraordinary ideas already exist to address problems we face; at least one of which is better than the idea currently foremost in thought.
    • Dave Schnedler
    • President, Corporate Planning Forum
    Mauboussin's book focuses primarily on investment decisions, where intuition can be notoriously misleading. A much better and more balanced discussion can be found in "How We Decide" by Lehrer.

    Decision Making is a process in which both analysis and intuition play their respective roles; it is a process which requires continuous improvement, and the prerequisite for this is to honestly perform post mortems and learn from our mistakes, albeit the individual, the team or the enterprise.

    In answer to the original question, there is no ONE BEST WAY to make careful decisions, except to take a process perspective and continuously tighten the process via informed and honest feedback.

    Perhaps for simplicity sake both Mauboussin and Lehrer focus primarily on individual decisionmaking, but in my experience business decisions are primarily group or team decisions today, which gets really interesting!

    Decision Making can seem academic and abstract, yet what can be more core to business and personal success than this? What would a 10% improvement in the batting average of CEO staff decision making do to the bottom line? 10% is a reasonable and achievable improvement objective.
    • Anonymous
    "As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality." - Einstein
    • Cherie Jackson
    • Director, Transformational Leadership Coaching, TruePower Unlimited
    When using intuition not as a specific tool but as a living and breathing way of being, one will find listening to the crowds insufficient, especially when cultural flavours and trends are in constant change. I much prefer to let my intuition take me to a chosen expert in such times of question. The way to align oneself with authentic intuition and to hear its promptings in our lives especially during times of change is to face and process through all self-doubt.

    Not an easy task for the beginner. Self-doubt is what makes us leave the magical world of clarity and true wisdom for a mind-set that is in constant stress of the need to be right or to always be making the "right" decisions. At the end of the day, one may realize there is no luck... arriving at the right place, at the right time drawing to us those people and events which can spur us forward in a seemingly effortless manner is a result of careful and conscious inner healing.
    • CJ Fearnley
    • Executive Director, Synergetics Collaborative
    The problem with both intuition and data-driven decision-making is that they will fail regularly. Both may work for extended periods, but eventually non-linear effects impinge on the situation and once sure bets become devastating losers. It is almost impossible to know when unpredictable change will occur: if our models had access to the mind of God they might work unfailingly, but they don't and never will.

    I see two ways to deal with this.

    1. We can incorporate more comprehensive considerations into our models (intuitionistic or data-driven or both) so that fewer unpredicted non-linear effects go unheeded. But fundamentally, there are always too many unknown unknowns to make the "right" decision all the time.

    2. We can acknowledge that there is a fundamental randomness inherent in decision-making and recognize the strength that diverse markets provide wherein only a few will fail with each big change in the system dynamics. Isn't that the strength and beauty of robust, diverse markets: they can adapt to the one super-abundance in business: great ideas that don't work out (as well as the few that do!).

    But we should stop deluding ourselves into thinking that business can ever be a "sure thing". Business is fundamentally a trial and error process to figure out how to service the world's needs and wants on an ongoing basis.
    • Selami Hosaf
    • VP, M.emin
    There is no luck in this life. Luck means randomness and meaninglessness. If we deal with very sophisticated stuff, we must see the fate of God...He is in all details of life...so there is no luck....
    • John Farnbach
    • Principal, Silver Streak Partners LLC
    Consulting with smaller companies on product development practices, I see many of these firms that rely on top managers' intuition to make decisions. This can work well, as long as some conditions are met:

    1. The decision management must be explicit -- people must know who makes what decisions. A firm shouldn't espouse delegation, but practice top-down decisions.

    2. Investors and higher level managers must have enough confidence in the decision maker's intuition that they do not second guess decisions (substituting their own intuition for that of the decision maker).

    3. Intuition must be based on experience and facts. Intuitive decision makers need to police themselves to be sure they are not simply guessing. Strong intuition without experience or facts is simply gambling with the firm's capital.

    Finally, recognize that individual intuition does not scale up as the firm grows. A single individual cannot keep abreast of many projects, and at some point the firm needs an effective framework for delegation.
    • Seena Sharp
    • Principal, Sharp Market Intelligence
    It's important to differentiate the types of decisions; the same approach is not effective or appropriate in all situations.

    In one's personal life, intuition or gut are useful as they reflect our past experience - if (and it's a big "if") you make good decisions most of the time. That indicates that you incorporate good input, not just emotion and you can count on your judgment.

    In business, decisions require different components. Intuition and gut reflect the past. In a rapidly changing world, we cannot expect the past to resemble the near future. Therefore, making decisions based on what worked in the past may not be a good model.

    What's required is a good solid base of the right information. The right information is current, accurate, relevant, objective and sufficient. If you don't have all of this, then you may be missing some crucial info and may make a decision that's not in your company's best interest. Simply put, the better the input, the better the decision. And it's more likely that the decision will meet the company's expectation (increased sales, successful new product launch, new and different customers, and so forth.)

    The problem with the wisdom of crowds is that is assumes that the crowd is informed. There is such an abundance of information today that much of what we know is headline-type information. Headlines are useful in providing a first look, but they are often misleading or insufficient and therefore not good indicators of the entire story. Think about any big story of the past year. What we first heard on Day 1 was very different from what we understood after Week 1, Month 1, etc. As the story unfolded, so did the quality of the information.

    I've thought about these issues for decades and they're addressed in my new book, Competitive Intelligence Advantage (Wiley, October 2009). Business decisions must be built on a foundation of the right information and analysis. Competitive intelligence is not data. It's the right information that's analyzed and applied to the company's unique situation. And it's not about competitors; that's insufficient.

    Good business decisions must include external factors as every business is impacted by forces outside the company or industry, including what's changing with vendors or distributors, technology, industries indirectly related (raw materials, packaging), regulations, demographics, societal changes, etc.

    Bottom line: in a complex and unpredictable business world, good decisions are built on a foundation of information and intelligence. Decisions need to be smart and they can be.
    • Luis X. B. Mourao
    • CTO, Upside Commerce
    Very interesting question.

    Mauboussin has a very good point the value of intuition is based on our ability to recall and associate a given set of inputs with a given set of outcomes. Given the increasing instability of the environment in which we operate, it's becoming harder and harder to rely on experience.

    That said, no model can in useful time capture and process all the factors that in the real world influence an outcome. As a result, and while it helps to diligently collect and analyze relevant data, it only gets you so far. Add experience and it will get you a step further.
    • Maree Conway
    • Director, Thinking Futures
    Our worldview conditions what we accept and don't accept as real, and this conditions how we make decisions. Being aware of your worldview and biases is the first step to wise decision making, along with having an open mind to let others provide you with information (eg crowdsourcing).

    You need both data and intuition, but our current focus on evidence based decision making lets us pretend that we don't have to question our assumptions about what is real or keep our eyes on the future. As others have pointed out, quantitative models are based on the past, and we know the future is subject to discontinuity and derailment of past trends. Data/Information is but an input into thinking about decision options, not a determinant.

    Information+intuition = wise decision making
    • Anonymous
    There are no more single model approaches. Determine the question and the method of finding an appropriate answer as to what data/information/knowledge will flow. Interesting question but it assumes there is a "correct way"....no way!
    • Jay Somasundaram
    • Systems Analyst
    The mistake is in assuming that there is a single point at which the all-important act, "the decision" is made. In reality, there are a whole range of actions that make up the whole. Major disasters are rarely caused by a single event, but by a number of often in themselves minor errors. Simarly, success requires a range of activities coming together well.

    The implementation matters more than the decision (including knowing when to change tack). Similarly, the pre-decision phase is also critical - knowing what to investigate, what is done to influence the decision-making process, even that a formal decision needs to be made...
    • Lianyou Li
    • CRBC
    According to my own experience, under high uncertainty environments it is very important for a decision maker to do decision based on his or her own institution. i do not mean others' suggestions are not significant but i mean when everyone faces uncertainty, a high perspective and responsibility are needed. so a leader, decision maker, must take his or her commitment because an average member has not had such experience and especially responsibility.
    • Kamal Gupta
    • CEO, EdSeva Software
    The way I do decision making is to:

    1. Spell out my assumptions. These sometimes have to be revised.

    2. Crunch the numbers. I don't find any substitute for it.

    3. Think hard, looking for insights. I have found that thinking hard always helps you identify trends and counter-trends within the information.

    4. Use expert advice & tap my professional network as sounding board.

    And then, finally, own the decision. This is extremely important if one has to be a leader.

    As the saying goes, it is 99% perspiration and 1% inspiration.
    • V P Kochikar
    • Principal Researcher, Infosys Tech
    In my experience, decision-making is a fascinating tussle between the heart and the head. Good decisions strike a delicate balance between the heart (intuition, feelings,..) and the head (logic, math models,..).

    This tussle can be highly productive - an idea that comes from the heart is often supressed by the head (as being too fanciful etc.). The heart then works on honing the idea, and it frequently bubbles up later in a more practical avatar which is "acceptable" to the head (this works the other way too, with the roles for the heart and head being reversed!). I've found that with some effort, this process can be made convergent and helps arrive at very robust decisions.
    • Jeremy Stunt
    • Executive Coach, Limbic Human Capital
    I agree with comments by Marlis K and Maree Conway: this is an "AND" not an "OR" situation.

    I have learned that it is helpful to host a "conversation" between my rational / analytical side and my intuititive side. By listening to both "arguments" I can sometimes generate another perspective to the issue at hand. Neither side is "right"; both are part of me; both are helpful.
    • Essam Hossny
    • Business Analyst
    Simply, I agree with the fact that:

    1) First, you need to achieve a deep understanding of all relevant elements to the decision as a decision maker, then model these elements to be part of the decision process.

    I agree also that the decision makers can create the luck and (not need luck) for achieving their objective.

    Intuition and personal life experience are an important part for decision making that create a unique factor to the equation.
    • Farah Kadri
    • Software engineer
    Decision making always depends upon situations and your way to evaluate and decide. different people take different decisions for the same thing and that does not mean they are wrong. As there are two sides of the coin, person looking from one side will say its head while on other side its tail, but both are correct in their own way.
    • Anurag Sharma
    • General Manager, HCL
    Honing our intuition definitely leads to a more accurate decision making. This has both a direct and indirect effect. Raising our level of consciousness, also known as intuition, also imparts the ability to select the right 'tool' or 'model' leading to better decision making.

    Fine tuning our 'Intuition' provides a link to higher planes of decision making - hence imparting a 'short-cut' to the final decision.

    It is a well known fact that solutions to many complex scientific problems have 'revealed' themselves to many a scientist in a state of higher consciousness, and sometimes in deep undisturbed sleep(the Double Helix of the DNA is a classic example).

    This is also another form of the classic debate between the Scientist and the Theologist; after all, Intuition is more in the domain of Theology / Theosophy and Philosophy than hard mathematcal formulae of the scientific practitioner.
    • Edward Hare
    • Retired Director...Strategy and Planning, Fortune 250 Manufacturer
    One word....motives!!! They drive everything!!! Decisions describe what we'll intend to do, however we get that point. Models, consultants, navel gazing or torturing "data", group think, and intuition are less the point. Let's be honest here. People do what they see as in their own best interests. On their part, "leaders" show the way, provide context, ensure a thorough consideration of issues and consequences, and get others to enlist and support.

    We've become a society driven by greed and winning at the expense of others or, often, the greater good in general. Short term generally wins out over the long haul. Instant gratification simply isn't fast enough. Those motivational foundations confuse the study of decision making. One can not trust a decision without knowing the motivations and self-interests that drive it.

    We spend far too much energy trying to figure out who has what to gain, and who has what to lose. Go sit in almost any "meeting" and watch the dynamics. Who's in charge? Who's promoting their own agenda.....and why? How do I protect myself? Those are the wheels that are churning in most of the attendees minds.

    Openness and honesty are the sunlight that's needed to make options discussion and decision making as effective and efficient as it ought to be......needs to be.
    Disclosure.....I've read all of Gladwell's books and find them insightful and thought provoking.
    • J Roy Martinez

    I believe in two quotes:

    Harvey Keitel in Thelma and Louise, "Smarts only gets you so far and luck always runs out."

    Seneca: "Luck is when preparation meets opportunity."

    I think luck does make a big difference. But one needs to be able to capitalize on it.

    My experience about people that shoot from the hip is that they are self-limited. Organizations need to be able to make a myriad of decisions without consulting a "guru". Eventually a manager like this reaches the limit of his/her experience and intuition...and his/her organization tops out.

    • Kapil Kumar Sopory
    • Company Secretary, SMEC (India) Private Limited
    There cannot be a tailor-made solution for decision making. Much will depend on the nature of the problem/issue on which decision is to be made. For day-to-day matters not impacting the business, decision-maker can and does normally use his/her independent common sense ensuring sticking to the decision and not reversing/changing unless there are acceptable cogent reasons for this. However, wherever the issues are more complex touching upon the basics, strategies and future long-term plans, independent judgement alone will not be sufficient.

    A CEO cannot be expected to have updated knowledge of each and every work area and must therefore take appropriate cues from the views of the experts/specialists and then use his experience and intelligence to interact in depth will those who matter and then decide the course of action(s).

    I do not agree that taking support of data and information will be futile. After all we need not shoot aimlessly under a self-created impression that the target will always be hit. For, if it was so, autocratic administration would not. fail more often than not. It is worthwhile to be guided to a great extent by the experience of others learning from their successes as well as failures. Yes, these should not bias the decision-maker who, it is expected would make decisions examining all pross and cons whether recorded in black and white or not. Posterity is free question the decision(s) and there must be suitable explanation/answer thereto. Once one has played his role to the best of one's acumen, 'Luck' too will cooperate.
    • Key Account manager
    • Coca-Cola
    I think business life has a balance of its own. In our managing styles, we do have to use our intuitions but we should mistrust it as well.

    When we are 100% sure about something, we should definitely go for it. That is because we might not have the time to think it over. The possibility of failing would be really low.

    But whenever we have a reasonable doubt, we should think twice, get some help, and use some quantitative techniques/models.

    So, not one way or another but a balanced combination could be a key to success in business.
    • Erwin Peter
    • Consultant - President, Logra GmbH
    Benjamin Franklin already understood that intuition alone is not sufficient, when he wrote to Joseph Priestley in 1772:

    "When these difficult Cases occur, they are difficult chiefly because while we have them under Consideration all the Reasons pro and con are not present to the Mind at the same time; but sometimes one Set present themselves, and at other times another, the first being out of Sight. Hence the various Purposes or Inclinations that alternately prevail, and the Uncertainty that perplexes us."

    When taking complex decisions there is no way around gathering sound information and presenting it in a structure that our mind can understand. Based upon this information and applying creativity and intuition a decison can be taken, by human beings, not by mathematical models.

    This decision making process should involve a group of people. More people - more information - more points of view - more creativity - more intuition - more devil's advocates to test assumptions and conclusions. This group should be of a reasonable size: big enough to make a contribution, small enough to prevent additonal layers of complexity in coordination etc.

    This also applies to decisions that are complex, urgent and important at the same time. A general doesn't take decisions just based on intuition. A general has a group of people going through a clearly defined process involving information gathering, involving being creative resulting in the presention of robust options.
    • Gaurav Goel
    • Asst. General Manager, Reliance Communications
    We are living in an increasingly interdependent world. The problems are getting more and more complex as the number of variables that influence outcome of any situation are increasing.

    We have to think twice or may be 10 times to predict a reasonable accurate outcome of our actions. But there is a good probability that we would miss some variables while thinking.

    While taking decisions we must analyze all the available information and at the same time we must be cautious of the fact that there are factors beyond our knowledge that may influence the outcomes of our actions.

    Intuition is product of experience and knowledge. It is about applying learning from diverse and unrelated areas to estimate risks and probable outcomes of any particular situation.

    Intuition is useful in making reasonable good decisions in situations where we have limited knowledge or we do not have enough resources and time to analyze all available information (which is the case most of the times).

    The key to make good decision is to analyze available information and put the results of the analysis through the test of intuition. I think that the capability of intuition in helping us in making right decision can be increased manifold by a thorough analysis of available information.
    • Sanjay Dhingra
    Mostly, intuition works for me. But I'm not obssessed by it.

    An intuitive decision works best when there are personal preferences that need to be matched with external opportunities. Say, finding a life partner. You are more likely to make the right decision by relying on your intuition than on tabulating data under for and against heads. You'll never decide correctly by being too rational here. If it feels right, it'll work out. If you don't force yourself to feel a certain way, you'll decide correctly.

    Intuition works best when I am feeling nice and good about me. When I am feeling down and miserable, I have noticed that intuition goes missing. That voice from inside just doesn't say anything. Actually, I have figured that there is so much analysis going on in my head and there is so much noise that I block intuition out. Taking a break and suspending all analysis and decision making is the way I resort to in order to start paying attention to intuition once again.

    This is not to say that I rely purely on intuition. In order to make my decisions, I listen to intuition and I make my analysis and verify what intuition is pointing towards. In new unfamiliar areas I have to first collect the data and understand the realities. When I do this ground work, I lay out the basis for intuition to make a suggestion even in an unfamilar area. Of course, I verify the intuitive inclination before acting upon it.

    There is another reason why intuition has to be dealt with carefully. It reflects what all is going on inside one's mind. If there is a biasing thought in the mind or an undesirable feeling going on inside related to the issue at hand, it can corrupt intuition. If I am not invested in the stock market, my intuition about where the market is head can be correct. If I am invested, I can be obsessed about wanting it to move a certain way that I overanalyze, trying to convince myself, so I block intuition out. When I learn to look at my investments objectively and detatch myself from a particluar outcome, I become receptive to intuitive feelings again.

    So what I am saying here is this:

    Intuition always exists, it is whether I am listening to it or blocking it out. Intuition is independent. Do not confuse personal desires with intuition. When analyzing a complex situation becomes difficult, my best bet is to feed my mind with all the data and leave the decision making on to intuition.

    This is how I have analyzed intuition works for me.
    • Adam Cohen
    • CEO, Accelerant Performance Solutions
    Leaders at all levels of an organization should honor their personal explicit and tacit knowledge, gained through work and life experience. These two knowledge aspects inform one's intuition. However, leaders who rely solely on their personal intuition are missing a key source to strengthen their decisions - organizational knowledge and intuition. The primary way to leverage the organization's knowledge is to gather, analyze, and take action on data. Effective leaders balance personal and organizational knowledge, dynamically intertwining data-based and intuitive-focused knowledge to make better decisions.
    • Rob Stancliffe
    • Analyst
    Doesn't intuition after gathering the facts always win out? It seems like great decisions happen when leaders gather facts, and then use intuition to fill in the gaps in the story. Like when Bob Lutz conceptualized the Dodge Viper, he gathered information, analysts interpreted the data in a way that discouraged the creation of the muscle car, Lutz used his intuition to interpret the data differently.

    I'm sure there are plenty of examples of those decisions not turning out so well... Carly Fiorina's HP Compaq deal may be a decent example, although that seems to be a better deal now than it was 4 or 5 years ago even.

    I guess what I'm saying is that intuition often represents a lifetime of fact gathering and preparation, sometimes people generate plenty of luck just by actively looking for opportunities.
    • Dennis
    • Quality Advisor
    With a more holistic and long-term view of our symbiotic existence, a sound basis of ethics, principles and values guiding our personal existence, and our limited ability to impact more than 6 billion other people, how many of what we consider "decisions" actually are relevant? If first we are set on a sound course, whether the direction to take matters and what direction it should be become apparent.
    • Guy Gould-Davies
    • Owner, Driving Insights
    This subject is highly topical in today's business climate yet - in my view - is rooted in one of the most timeless themes in management science: the issue of thinking vs feeling in decision making.

    As a result - and certainly affirmed by the character of the other posts - it is a highly polarizing! The idea of using feeling in the context of decision making makes many people highly uncomfortable which is why intuition gets a bad rap. Emotion is associated with a lack of discipline and robustness in analysis (with good reason to some degree). The fact that intuition cannot be attributed to a specific place, to a linear, observable concrete set of facts also makes it an easy target. Intuition cannot be explained. It emerges or does not.

    This character of intuition raises the other main driver of discontent that emerges with reliance upon it: the lack of control. Management needs to be confident it can replicate results, to assure the effective use of resources and ultimately the return to shareholders.

    Which leads me to the underlying human issue in play here, which in my view is trust. Decision making begets responsibility and accountability. One feels no better having put that trust in the hands of so called 'experts' whose predictions and recommendations prove subsequently to be wrong than in an internal capacity which transcends tangible analysis and which cannot be explained.

    The dimension of 'luck' or fortune is a red herring in the broader discussion. It is something one can certain benefit from but which cannot be planned, so including it in the development of sound management practice seems odd (at least to me).

    I have to conclude with the sentiment expressed by several of the other commentators. Sound use of intuition depends on sound judgment, itself a product of experience and the right kind of reflection. As with any tool, erudite use comes from knowing how to use it, and when. And when not to. This, I believe, cannot be taught nor prescribed, and this in part sustains its immense value among those practitioners who do it well.
    • Raj
    Lack of data and structure (and an overreliance on gut) in decision-making is a real problem for innovation teams, as this recent HBR online blog describes: http://blogs.hbr.org/research/2010/02/innovation-teams-lack-data.html.

    The research shows that voting--or electronic markets, as you call them--can make decision-making more effective.
    • Prof R.C. Saxena
    • Senior Engineer (Retired), IBM Corporation, USA
    Intuition is a product of lifelong learning and in having been involved in making decisions under various condition of real life situations. However, it is just a start but cannot be the basis of the solution. If anything it has a strong personal bias.

    In my belief and experience as a Key Designer in the IBM Mainframe Laboratory I always collected people who would be involved in all aspects of proposed product evaluation before it would be settled for manufacture. There would be "Class Room like Discussions without regard to the formal education or documented Skills". Experience and apprehensions will come out. The calling ultimately was mine and the result always was a functionally great product that would get incorporated in the Mainframe - always good for the first time - the architecture was good for several succeeding generations.

    I believe intuition ought not to play any part and the luck has no role except to assure that the decision maker remains sincere and honest and objective not to be obsessed or carried away. Sincere effort to harness all the collective wisdom coupled with a commitment to deliever the Complete Solution ought to be the key.

    I believe the author is right - the decision has got to be based on careful deliberation to get "Zero Defect" approach while maintaining calm, grace and dignity under pressures to come up with a resolution.

    Prof R.C. Saxena,
    International Engineering and Management Consultant
    • Philippe Gouamba
    • Vice President of Human Resources, Skyline Windows, LLC
    There is a lot to be said on the use of "intuition", "a more careful approach", "wisdom of crowds", "the use of experts" and "best practices" in the managerial decision making process.

    "Is intuition losing its relevance in an increasingly complex world?" Yes, sadly it is.

    The problem is that our true decision making abilities are being thwarted by the pressures and complexities that exist in today's business climate. As an HR Executive, I make many decisions but the majority of them are made by committee. In other words if there will be lay-offs, terminations or hirings, departmental supervisors, departmental managers and departmental vice presidents are involved.

    It is the same process when we roll out a new healthcare provider or a new 401k third party administrator. If necessary we call-in our in-house counsel and on a rare occasion we consult with our outside counsel to arrive at a decision. The sad truth is that if the decision that WE reached turned-out to be a disastrous one for the firm, we can all say.."well...it was not me, I gave my opinion and presented some facts but that is all I did"...and I would be justified in saying that because the decision was really made by a committee.

    I feel that in today's tough business climate, personal responsibility is evaporating and boards and nebulous committees are running businesses. The threat of lawsuits (frivolous or not), the fear of having our top executives dragged to appear in front of a judge or an inquisitor from bodies such as OSHA, the Federal Human Rights Commission, the IRS or various other labor boards is what is forcing decision makers to work in committee and to shy away from personal responsibility. In all decisions I make, I have to ask myself "am I doing the right thing?"

    Then I have to ask "is this the right thing for the company?" Next I ask "will this decision or course of action stand up under the scrutiny of an investigator, an arbitrator or an administrative law judge in a court of law". Rhetorically, I ask: Can I face a judge or some equally terrifying inquisitor and tell him/her on behalf of my employer that I made my decision based on intuition or a gut feeling, or that the great extent of my research amounted to flipping a coin? It seems to me that it is almost OK (mitigating circumstances) to be wrong if you can prove that you that you did your due diligence. It is sort of like going to war on the wrong information provided by bogus intelligence gathered by the world's best intelligence agency. Please forgive me; I could not resist that one.

    I conclude that intuition is definitely out. As Managers and Executives, we still have to bring to the decision making table all our intelligence, all our experience, our wisdom of the crowds, what our experts have whispered to us (we pay them so we can look and sound like experts), our gut feelings, our best practices and vigorously debate the intended and unintended consequences of our decisions. Once we have done that, we grant ourselves the luxury of "decision making by nebulous committee" where everyone enjoys a degree of deniability. And now ....back to business as usual. What is the next item we need to decide on? Lunch?...where is the lunch committee?
    • Noaman Al-Saleh
    • CSR & Media Relations Manager, ENOC
    The activity of making a good decision does not protect from failure. Good decisions are based, first of all, on having a good grasp of the issues being decided on. However, remember that a so-called "good" decision does not necessarily guarantee a satisfactory outcome. Depending on how complicated the issues are, a person may need to consult with others. It thought that the rule of "two heads are better one" applies in decision-making. When a group is working well together in addressing issues, they are more likely to come up with the best decision than any one person alone. Sometimes, of course, there isn't time or opportunity to consult with others on decisions (e.g., in urgent situations).

    So a group decision is often best reserved for issues that are complicated, sensitive or unfamiliar. A group decision, in general, is also preferred when the implementation of the decision requires everyone's involvement or support. It's often a personal choice for leaders on where to put the balance - i.e., between 'solo' decision-making or group decision making.

    Do not underestimate the importance of luck in the outcomes of your decisions, employing Nobel Prize-winner Daniel Kahneman's observation that success requires some talent and some luck, while great success requires some talent and a lot of luck.

    Accept the fact that "The Best Decision Doesn't Always Make The Most Financial Sense."
    • Nick Chipman
    • Partner, PwC
    The scale of the decision seems to be important here.The longer dated financially significant decisions that need to be taken in some industries-oil/gas, mining, energy and critical infrastructure- are typically governed by a series of review and challenge sessions where intuition plays a key role in shaping how a collective decision is made-or in some cases avoided.Often there is significant risk and uncertainty about future conditions,markets and intuition plays a substantial role in the judgement calls that are required for such significant decisions.

    The role of collective intuition-for the sake of a better expression-is fundamental to our modern systems of governance since both the interpretation of facts/data(which may have error or omission) and the feelings about the decision(again,with the biases so ingrained) may well be influential in what is agreed to.

    Another useful way to express this might be what I refer to as "one's sense of order". It may be that what appeals to one person's sense of order,does not accord-exactly or at all with others. Making sense of what frame of reference each member of a team,executive committee or even at home with the family might help us with anticipating others intuition- although from first hand experience this can of course be dangerous(eg.reactions to that birthday present that you had your doubts about but still purchased!)
    • GS Krishnan
    • Manager, TCS
    In my opinion,

    A: Each of us are unique in our own nature. Hence a generalized view of "x is better than y" approach should not be the culmination of the discussion

    B: Self would take "Instinct based decision" & "So called data / model based decision" as 2 different strokes / options. We should pick our stroke, based on the situation & the remifications / criticality dealt with. Its like a baseball where the shot called for is based on the situation & the delivery

    C: I would not buy the concept of less reliance on experts. In contemporary world, we can observe (from the industry & job markets) that the SUBJECT MATTER EXPERTS / CONSULTANTS are very highly sorted & without a proven success which organization would go for a Expert ?

    • Kumara Uluwatta
    • Senior Lecturer in management Accounting, Wayamba University of Sri Lanka
    Love your organisational resources and maintain the quality, flexibility and competitiveness strategies and you should and must have a dream for your organisational success.

    On the other hand, you have to the dream of your carrier development target towards your wealth development through the development your own property, organisation as well as the country.

    Actually you should have the courage for all above to maintain the careful decision making process.
    • Paul T. Jackson
    • Owner-Consultant, Trescott Research
    To directly answer your questions:

    Do you rely more on experts or "the wisdom of crowds"?

    Crowds are likely to have different objectives than you or your business...so following them, such as "Best Practices" is not necessarily the best approach.

    Is intuition losing its relevance in an increasingly complex world?

    No. There is the impression from most that intuition is some magical element within one's personality, when in fact intuition is, as someone above described as observing what is going on about you; using that information in synthesis with other hard data/information...such as trend watching...not something that is necessarily from prior experience and prior knowledge.

    Is it normal to overlook the importance of luck in decision-making?

    "Luck" is the unknown (gamble) of any choices (decisions) we make. Will we be successful or not? We all wish for good outcomes, but we don't expect "luck" to be part of the equation in our decisions. It's not really important in decision making...only a word we use to tag / assess the outcome of a known risky activity.

    As someone else above observed; we often make decisions on trying to fix or engineer the solution to the wrong problem which is why many are now using the TRIZ methods of discovery to the real problem to be solved or addressed, and also discovering what contradiction lie in wait; deciding on the optimum approach to solving the problem found.
    • Sri Aurobindodasan
    • Consultant
    In my humble opinion, intuition is foreseeing what is going to happen. It WILL happen 100% and never fails. If your so-called intuition often misleads you, then it means you do not HOW to see through intuition. Please don't confuse intuition with guess work or learnings from the experience.

    For any decision making,

    1. Relax and shut your mind off for some time. You can say to your mind "baby, take a nap for some time".
    2. Close your eyes and find your soul which is nothing but a light in the middle of your chest. Soul is a divine spark that always transmits direction/guidance from divine.
    3. Ask for its guidance explaining the situation.
    4. Soul will tell you what is good and sends you the right help.
    5. Your intuition will be the light in between your eye brows. It will always tell you what is going to happen for sure.
    6. For anything, do what your soul says and be prepared to accept the results revealed by your intuition.

    Execute the actions using your mind with full concentration. Remember, mind is a powerful servant but a bad master.


    You see an accident on the highway. Someone might be suffering inside the vehicle. Hospital is very far off. Your mind says in duality (as usual)
    1. go and check if someone needs help
    2. don't go...it might be a trap and you will lose all your belongings.

    If your soul directs you to help then do this:
    a) Call emergency. Without waiting take him inside your car and start driving.
    b) If your intuition says "he is going to die", Talk to that person and record if he wants to say anything to his family.
    c) If your intuition says "he is going to live", just concentrate on driving and reach the hospital quickly. You may find a surprise clinic nearby.

    If your soul directs you NOT to help, follow that. Your intuition may say emergency experts will take care of it.
    a) Keep driving. Call emergency.
    b) On your way,you may see emergency vehicles going to the spot to take care of this

    Note: Contacting soul and intuition may vary from seconds to hours depending on the situation and his/her experience.
    • Anonymous
    Intuition or decision tools? My work in "Think Again" explains that you can rely on intuition when you are doing things you are expert at. But when you face unfamiliar issues or situations where you have self-interest or emotional attachments, you need to protect yourself from making stupid decisions. So yes, beware of intuition when things are unfamiliar.

    But how to protect yourself? Decision tools can help, but they are easy for you to bias or ignore. So you really need some of the following - additional experience in the area where you are unfamiliar (not always possible), a balanced decision group that includes some with relevant experience, a wise governance group who can push back if the decision looks odd, tight monitoring so that you can reverse the decision if it proves to be wrong.

    In other words there is much more you can do to protect yourself than using complex decision tools. By the way, I personally like the wisdom of crowds. If companies put their strategies down on paper and asked their employees to score the bits the liked most and those they liked least, the companies would end up with much better strategies.
    • Michael Otten
    • Board Member, Multiple educational institutions
    Decisions on complex issues should be informed by maximal rational analysis and experience, but with instinct or intuition being the ultimate arbiter. Complexity cannot be addressed with any mathematical construct other than fractals, and they will not yield a yes/no answer for any complex question. Probability is a useful analytic tool, but Normal Distributions are over-rated. Luck is an important component in most results, but there is lots of good luck out there to be capitalized upon. "Blink" is an insightful look at instincts, but does not sufficiently recognize how often or how easily we can be fooled. The Madoff scandal, and much of the recent economic crisis should make that clear.
    • Jasper Ojongtambia MS, MBA
    • Consultant, AEC Computer Division
    Situation: We live in a complex world where products and services change by the minute. The information age has redefined the corporate work place; hence decision making should not based on one solution fits all.

    Every decision should be base on all available tools at our disposal to make an intelligent, cost effective and ethical solution to the problem at hand. Does the decision pass the ethical "sleep test"?

    History: How will history judge the poor decisions made by some CEO of some hundred plus years companies in our country that failed to listen to their customers and adapt to the wave of change made possible by the global community propelled by the internet?

    It is my opinion that had these CEO employed their intuition, listened to their customers and used quantitative models to design their products their situations would have been different?

    Method used: Is intuition losing out? No! Should we turn to quantitative models? Yes!

    Conclusion: Decision should be based on all available facts and the method or models used to arrive at the solution should depend on the scope and cost of the project at hand.
    • Pat B
    • Systems Designer, Baxter Healthcare
    Why would there be a single BEST way to make decisions? That's like asking for a single BEST decision.

    So much depends on the situation - In a stable, unchanging environment, benchmarking would be the way to go. In a highly turbulent, chaotic environment, another method would be best.

    A better question is: Where can I find a pattern book that will help me determine the type of decision I am trying to make, and methods that work best in that situation?
    • Sanjeev Himachali
    • www.sanjeevhimachali.com
    At the beginning, I like to reiterate something that I read several years ago, success in life is influenced more by choices that we make rather than chances that get. I believe that decision-making is a complex process and not one model fits everyone. Decisions of past will be of little help in making new decisions but can certainly be used as reference. On the contrary, I also believe that we do not make decisions for a moment or for present. Whatever decisions that we make today will have direct or indirect impact on our future.

    To conclude, I must say that one need to consider experience/intelligence as well as intuition for making effective decisions.
    • Vanitha Rangganathan
    • Malaysia
    Some of us enjoy making our own mistakes because the lessons are greater and long-lasting. Experience makes us personally wiser and gut feel steers us confidently in our new discoveries. 'Wisdom of crowds' breeds convenient conformity and creativity is often lost in the process. Conformity and collectivism are relevant only when boundaries are required to ensure order and alignment of goals. Individuality and the liberty of exercising the many facets of it (clarity of thought process, inherent decision-making capabilities, birth of new ideas, among others) still reign supreme.
    • Anonymous
    A friend of mine is going through lengthy rehabilitation from an injury, giving him lots of time to reflect and consider his life and future options. He has found that when faced with a decision, it is helpful to meditate on the options, test a "yes" to each one and notice his physical and emotional response.

    Every time he perceives a hesitancy in his reaction to the "yes", he digs deeper into the information around that option, and he says every time this has happened, he has found something he had missed, which made a difference to his decision.

    So maybe we need to listen to our body as well as our minds and use our 'gut' reaction as a guide to when our rational mind has missed something.
    • Anonymous
    Organisations tend to employ a variety of quantitative measurements, but abandon it when the final decision is to be made. Many a time, data collected are skewed and presented in a manner where it verifies what one wants or expects to see.

    Ultimately, decisions usually seems to be based more on the intuition of a person or group (who are tasked with making the final decision) rather than through a careful approach.
    • Anonymous
    Is not our intuition the result of our past experience in certain similar situation? How often can we be sure that we have got all the data to make a decision?. What if we have limitation in getting all the necessary data in time and we have resource constraint to get the data? Despite having lots of data, one has to come-up with a decision, based on a pattern one sees out of the data. How you connect those dots matter? The connecting of the dots is done often by judgement or by intuition. Again probability comes in to picture.

    A good mix of intuition supported by data is the right way to go and also it would depend on circumstances.
    • rasheed
    • research assistant, david consulting
    i think the idea of using data and models for analysis has increased suggestions for problems solving rather than intuition. intuition is a culture which is not verifiable therefore it should come after reality.
    • Ahmed Y. Issa
    • GM-Key accounts, Aujan Industries co
    Decission making involves two parts: emotional and emperical. On the emperical side you need to collect all the information about the issue including the impending ones, with input from all the concerned. On the emotional side you have to consider different scenarios when you consciously know that the emotional element is involved in your decision and the consequences attached to that and when you take out the emotional element in your decision and put the last thing in your mind which is the bottom line result or probable outcome.
    • Fernando das Neves Gomes
    • Consultant, independent
    I think, I believe, decisions based on intuition is not the same as a guess of luck.
    When people deliver one decision and if it takes with the true responsibility of that and all it came with that, they put on intuition a lot of knowledge, a lot of observations and most of all an intellectual exercise were we predict the future, our entirely lieder work is just that, not easy. Then we have to prepare all the way to achieve that desired end, sometimes acting internally and others externally. Much we predict each decision impact and others influence, more we can predict and prepare all the environment to protect from bad influences and increase good ones.

    But it is not clear we achieve it, our influence capacity its crucial. So many times depending on that we have to share power, or even delegate it or acquire it, because we know, like in projects that strategic point to go on depend on that.

    Other times we deal with product/act impact, making it flexible enough to absorber different results.
    And yes I believe we knead a little of luck, competitors, universal grow and environment can influence results, people we have with us is a must, and like the beginning of a live event, we work a lot for it but we never know if it go to be a success until the end.

    Best regards,
    • Pallavi Marathe
    • IBM Global Services
    "Careful Decisions" is a paradox. Most of the times, if one tries to be too careful, one will not be able to arrive at a decision at all. In my opinion, decisions have to be intelligent. If there is past data available to help predict the future, it may be a good idea to refer to it. But in most cases, the decision maker is posed with a unique challenge.

    Every situation is different and hence the decision has to be different(unique). So while sometimes we may have something to refer to in the decision making process, it is intuition and intelligence that play the major role in arriving at the decision itself.
    • Nauman Lodhi
    • Business Manager, RegInOut
    I agree with Sariam. It depends on the issue at hand. To reach at some decision we frame out the possible consequences of taking some decision.

    Normally we use intuition to take low risk decisions. And I am sure that most people take routine decisions while relying on intuition.

    However, when it comes to high risk decisions many factors come into play and solely relying on intuition may help us take quick decisions but not the right ones.

    The question raised here gains importance when businesses have to set a course of action and that too in a short span of time. What to do in such a case? Intuition or Modelling ?

    In my view it's all about leadership qualities to take toughest decisions with a combined input of modelling as well as intuition.

    Yet it shall be kept in mind that intuition based decisions are taken best by those who are true leaders and have a proven track record of analyzing any situation and then following their gut in the end.

    • Matt
    • Guard Dog, HMG
    If anyone on this earth has ever made an 'intuitive decision' they should not be allowed to make a decision ever again. Mainly because they'll probably be dead!

    Intuition is the extraordinary genetic tool that is designed to keep sentient things alive. It's like an ancient and mystical guard dog that barks in the back of your head prompting the question "safe or not safe?" It focuses you on a moment in time so that you can make a better judgement. Intuition is merely a prompt to increase cognition. The action is judgement and rarely a decision in any form!

    If you put some meat in front of a small dog it will take a few seconds to answer the complex question "should I eat the meat?" If you linked up every super computer into one huge electric brain and put some maths in front of it, you'd be waiting a long time for it to answer the question "should I do the maths?" Oversimplified but true, all the computers in the world have less cognitive ability than a small dog.

    As Gladwell points out we share a small part of our brain with that of dogs. Every model ever designed, every bit of maths discovered, every decision making tool, every bit of data captured and subsequently analysed was done by someone being poked in the back of the head by a small dog. It's all based on intuition but that is not the point. Unless you have a profound autistic nature you can never make an objective decision and that is not the point.

    A simple issue like "should I eat the meat" becomes a month long analytical wet dream of scenarios and probabilities with the energy expended giving little or no relationship to the value (not money) associated with any of the possible decisions. Decision makers don't do the work, do they Mr Mauboussin? Ultimately in most modern cultures (subsistence societies are different), the judgement of "safe or not safe" is no longer related to the decision, as in the end, some over-paid fall guy says ... "F~#k it! Eat the meat!"

    In a fraction of a second the dog thought it smells funny ... don't eat the meat!

    Context is everything so well done Malcolm, but don't pat yourself on the back yet, as we need to talk about your latest oxymoron "innate talent"!
    • Manoj Jha
    • Director, Dheya Lifelong Learnings Pvt Ltd
    In the current competitive market scenario it may not be possible to map all the variables & wait for the perfect Logical Decision. Intuition in Decision making is a must. Large corporate are paying heavy price for killing the intuitive decision making.
    • Joe Schmid
    • Managing Principal, Oak Leaf Consulting, LLC
    Decision making and intuition are inseparable. You can't wait for all the information to be in hand and perfect. Decision making is the management of imperfection bringing into play portions of analysis, intuition, and synthesis. Analysis and synthesis are learned skills. Intuition is a function of cumulative experience - the more the better.

    The tag phrases about talent and luck would be better thought about as talent and intuition - great decision making is the marriage of "Blink" and "Think Twice" and the diligence in auditing the outcome and making corrections as the decision plays out.

    What has changed is the speed of business and product/service offering life cycles. The time to accumulate market experience is compressed from decades to months. The lesson is to keep your mind open, absorb what is going on, and keep your intuition fed. "Blink" is there and always will be - it just higher maintenance these days.
    • Bill Welter
    • Managing Director, Adaptive Strategies, Inc.
    Great question and a fascinating string of responses.

    I'd like to put your question in the context of time. do you have five minutes, five hours, or five days to make the decision. Some times you HAVE to trust your instincts; sometimes you would be foolish not taking the time to crowdsource.

    Two great tools -- the wisdom comes from knowing when to use them.
    • Michael Leonard
    • Nonprofit-Partners
    Prof. Heskett - How would you characterize the decision-making process(es) used by Treasury Secretary Paulson, Pres. Bush, the Fed & the Congress over those few days in the fall of 2008 when the markets were seen at risk of collapsing and the initial decision to bail out the big financial firms was made?
    • TGale
    • Human Factors specialist, Aviation industry
    The great thing about intuition is that it can be improved through experience. If we make careful decisions based on a proven method of information gathering, model comparison, assessment of choices then monitoring of results we will experience the outcome thereby adding to our reservoir of knowledge that feeds our intuition.

    Intuitive or cognitive, when you make an important decision, always be prepared to be wrong.
    • Joseph Dunhill
    • CEO, Secured Capital Partners
    The formulation of "Synthetic" Asymmetric Information (SAI) is my driver to key decision making. It is formulated, in part, by understanding the blind spots inherent in "group think", defines and uncovers gaps between participants and stakeholders, and evaluates my own ignorance and bias when evaluating a plan of engagement.

    In one case SAI revealed that risk management was the real course of action necessary to accommodate clients' goals, resulting in an Alpha adjusted performance matrix for their investment portfolio.

    SAI in its purest from clarifies the situation: "They don't know...that they don't know". It grants me leverage and insight when developing value based decisions.

    Best regards,
    Joseph Dunhill

    HBS Executive Education Participant '02 &'06.
    • Anonymous
    When an organization is based on policies and procedures, the place for intuition is rather limited, and perhaps is relevant only in certain situations of ambiguity.
    Generally speaking, when policies and procedures are based on deep thinking and serious processes- there is no real reason to decide according to intuition--- the policies have the thinking embedded in them already.
    An oil-tanker cannot turn around and maneuver like a speed boat- every turn has to be thought about!
    • Ajay Kumar Gupta
    • Management Professional, MM 09, ASIAN INSTITUTE OF MANAGEMENT, MANILA
    The research article focuses on four things for making careful decision. Faith in intuition based on personal experience, wisdom of crowds, experts, prediction markets and system dynamics. I will discuss one by one on each method.

    Faith in intuition based on personal experience may lacks data to make careful decision. It depends upon the kind of experience and focuses only on one person. The person having less exposure to life and lacking varied experience is more likely to take wrong decision. On the contrary, person having vast exposure and varied experience in different circumstances is more likely to make right decision.

    Wisdom of crowds uses the mathematical model and lot of data. These data come from number of sources. So it should be more authentic and accurate than previous one, but authenticity and accuracy of decision making depends upon the number of sources of information and its reliability. More sources help to get almost right information.
    Experts and analysts predict on the basis of data collected by them and their personal experience. This again leaves many gaps due to their personal experiences and exposure. Personal biasness and attitude inculcated and imposed by environment plays a greater role. We may take the example of stock market analysts and omen predictors. We see that they always claim to be right but most of the time they are wrong. They predict in such a manner that they look and sound always right. In fact they are not. So careful decision based on experts and analysts suffers from many biases.

    Prediction market again based on betting by people is based on their experience and intuition. Buying lottery ticket is the classic example where almost everyone loses and no-one wins. In fact it is the vendor who wins. It totally depends upon luck and no effort. Luck follows effort and not vice versa. So anything totally depends upon luck has 99% failure rate. Buying the low priced share without knowing the history and financial details of company may make you rich sometimes but there are maximum chances that you may lose your invested money or may be negative. I think giving more importance to luck weakens our potential and capabilities and prevents us to make extra effort. Instead we should rely on effort which is in our control and should not focus on "Luck" whose outcome is unknown.

    System dynamics is more accurate because it is based on analysis of problem and finding solution using different systems i.e. trends, data and information. Snap judgment based on insufficient information and analysis often leads to analysis paralysis situation.

    So, in my opinion, the best way to make careful decision is to create a platform that is based on information, substantial experience, exposure and resources, and then make decision. Personality plays the crucial role to make decision. Complacent person having everything may not take decision whereas a passionate person will make decision even in the worst situation. It is the passionate person who follows his heart and intuition. Courage is the bridging agent between platform and your personality which is most important to make any decision in general and careful and risk related decision in particular.
    • Jayaprakash
    • Asst DIrector, IEEMA, India
    Intution is the outcome of a mini model. Data collection, retrieval and processing happen so fast in the mind that it seems ad hoc.

    Intutive decision making suffers from - being simplistic, individual bias, based on past data in a different setting and 'one size fits all' approach. It also impacts team work as there is no buy-in from the team members.

    Intution cannot be wished away as even in extreme cases of modeling, model to be followed, data to be used etc are all products of intution.
    • Mohammad Rashedul Islam
    • Sr. Executive, MIS & Group Reporting, Axiata (Bangladesh) Limited
    We need to rely both on experts and "the wisdom of crowds" depending on many key factors- the knowledge, experience, insight and creativity of the decision maker, the importance of the decision, the timeline, the environment dynamism etc. The world is becoming complex so you require experts to dig out but how far time and money allow you to chase the issue/problem in time. So, you need to make a quick analysis before selecting the effective decision making. I don't believe in luck in decision making.
    • Douglas R. Elliott
    • CEO, TEQ Development
    Fascinating observations. I found Edward Hare's comments particularly illuminating.

    Personally I am all for careful decision making. It starts of course with deciding on what to decide. And that depends on the decider.

    The influence of the decider on the situation requiring decision is analgous to observations made in quantum mechanics. To over simplify a bit, photons used to gather an experimenter's information from atoms and sub-atomic particles are themselves so energetic that they change the both the data as well as the experiment.

    Change energy to economic self-interest and decision makers (like experimenters) invariably warp decision making circumstances. Whether using intuition or logical decision making techniques is subordinate to the degree of warp introduced by the self-interest of the particular decision maker.

    In other word, whether one 'blinks' or 'thinks' a careful decision is less important than who is blinking or thinking.
    • Mark Zabel and Amit Phansalkar
    • Director, Product Development, Straight Line Performance Solutions, LLC
    Human brains are memory devices rather than computing devices. Thus any inference we reach as a result of intuition or introspections is a result of pattern recognition. Human brains are multi-sensory reasoners. They can associate multiple senses (auditory, visual, olfactory, haptic, etc.) with a single event and use that as a basis for reasoning about events. This introduces a lot of bias as almost all conclusions we reach are a result of pattern recognition based on our experiences.

    Mathematical models on the other hand are great at computing but are only as good as the assumptions that feed into these modes. These models are increasingly found to be too simplistic to model for the complexities of situations and for models that tend to be complex, lack sufficient training data.

    Management decisions, some more critical than others, have to involve an approach that is a combination of the two. An individual's vast knowledge and experience is critical to identify the patterns and generalizations that apply to many similar situations and that are likely predictive. To make reasoning more explicit we should make use of analytical framework that will harness all the power of personal experience while minimizing personal bias.

    Mark Zabel and Amit Phansalkar
    • Fred Pieplow
    • Principal, Time, Tools, Talent, LLC
    Businesses are complex systems with inputs and outputs working within larger complex systems like supply chains and markets. Lots of math and models work well for businesses serving markets where the demand for the outputs is increasing the variability is the big system is manageable.

    Where there are more outputs available than market demand, the predictability of results is more difficult. Your competition may do something silly which was not anticipated. Innovation may draw demand away to suppliers not seen before. The more noise in the systems, the less stable the models will be. That is where intuition and models together allow management to test their theories and prepare for the future.