Why Your Gut Is More Ethical Than Your Brain

If you've ever been part of a discussion on ethics, in school or elsewhere, chances are you didn't spend much time talking about your feelings. It's believed that to live ethically, we must engage our reason, which reins in the whims and follies of emotion. Ethics, then, is heavy on Spock and light on Sally Struthers. But what if unethical behavior is actually spurred, rather than prevented, by reason?

Consider a provocative series of experiments conducted by Chen-Bo Zhong of the University of Toronto. He put test subjects into interactions with an anonymous partner where they had two options: to treat their partners fairly or to lie to them. If they decided to lie, they would gain at the expense of their partners.

Before making the decision to cheat or be fair, the test subjects were given some guidance. Some were encouraged to think rationally about the situation and to ignore their emotions. Equipped with this advice, the great majority (69%) analyzed the situation and con-cluded that they should screw their partners. Others were primed to "make decisions based on gut feelings." Their guts were pretty trustworthy: Only 27% lied.

There's a twist: Even though the study shows that we would be treated better by people who trust their feelings, we're leery of them. When people were given a choice to interact with a rational decision-making partner or a gut-trusting one, 75% chose the rational partner.

Zhong concluded that "deliberative processes can license morally questionable behaviors by focusing on tangible monetary outcomes and reducing emotional influence." If only such behavior were limited to the lab.

In reality, it seems to have played a role in the Great Economic Kidney Punch we all just suffered. Mike Francis worked at Morgan Stanley before the economic collapse. He bought up scads of questionable mortgages, including some of the NINA (no income, no asset) variety, meaning that the bank giving the loan would not verify the customer's income or assets. The customer applying for the loan knew his answers wouldn't be checked, so he didn't face much risk in declaring, say, a $300,000 salary as a Taco Bell night manager. (What can I say? The people love my gorditas.)

As reported on This American Life's must-listen episode, "The Giant Pool of Money," Francis said that, with the NINA loans, the banks were "setting you up to lie. Something about that feels very wrong. It felt wrong way back then, and I wish we had never done it. Unfortunately, what happened ... we did it because everyone else was doing it."

When you're getting rich, it's pretty easy to soothe the ol' gut. If you need a rationalization, your mind will provide one. For instance, many bankers clung to their analytical models, which "proved" that their investments would be okay even if default rates reached historically high levels. Unfortunately, because it had never occurred to the bankers of yesteryear to give $500,000 loans to minimum-wage workers, the historical models weren't all that accurate. You've got to love the logic, though: Historically, the most weight I've ever gained in a year was 2 pounds, so I might as well start eating a quart of Ben & Jerry's every day for breakfast.

Looking back on the subprime-mortgage debacle, it seems the only accurate information in the whole ecosystem was Francis's bad feeling. And one suspects other people had it, too. What if a few dozen others in the chain had listened to that feeling?

A different industry provides a lesson in the value of heeding your gut about ethical choices. In 1987, Paul O'Neill took over as CEO of Alcoa, the world's largest producer of aluminum. On his first day, he announced that no one who worked at Alcoa should ever be hurt at work. The acceptable rate of accidents was no accidents. This raised a lot of eye-brows. Working with aluminum is a dangerous business, and there are plenty of ways to get injured. And Alcoa already had a good safety record, in the top third of companies. O'Neill recalls the skeptical hallway conversations among senior managers: "When the next tough economic time comes, he'll shut up about this."

He didn't. O'Neill walled off the topic of safety from the "deliberative processes" that Zhong warned about. "If anyone ever calculates how much money we're saving by being safe, they're fired," he told his team. Safety wasn't a priority; it was a precondition. He told people, "From now on, don't budget for safety." O'Neill's resolve paid off. Alcoa became one of the safest companies in the world, despite the aluminum industry's inherent risks.

Guts aren't perfect. For instance, we tend to feel so much empathy for individuals that it can doom our efforts to be impartial and consistent. But in the business world, we've tipped too far toward pure rationality. We need an emotional counterweight — and we already have it. When you're in an ethically loaded situation and your gut talks, listen to it.

Dan Heath and Chip Heath are the best-selling authors of Made to Stick: Why Some Ideas Survive and Others Die. Want to share a Made to Stick column with your team? Go to fastcompany.com/madetostick.

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12 Comments

  • Bob Dole

    Agreed with Jake that this study sounds slightly skewed... having said that, I did not listen to "The Giant Pool of Money" from NPR yet.. so will probably form an opinion after I finish with that particular broadcast. - FreakingFees.com

  • Jake Niekerk

    I think this study is skewed for two reasons:

    1) "Rationalizations", or the justification of actions after the fact, are NEVER rational, because they are blind to consequences and focus only on either gains or aversion of guilt, while rational process requires careful, balanced consideration and skepticism in an attempt to come to the most sound and practical answer. This happens to be a poor confusion of terms in our language, but we can alternatively translate these two conflicting concepts as "ego defense" and "contemplation", respectively. Therefore, you are not practicing sound logic when your thoughts lead to taking advantage of another person; you are trying to redefine a gut feeling to be selfish.

    2) Feelings are easily manipulated. If your emotional disposition can be altered ahead of time by the art of persuasion, or if you were to find yourself in the heat of crises and panic with hundreds of other people, or if a loved one's safety is compromised, or if a combination of these or other circumstances apply, you're moral intuition may be compromised. EMOTIONS ARE NOT BAD BECAUSE OF THIS, its simply a drawback to rely on it too heavily.

    So what I feel this study really shows is that the instinct to please yourself can compromise your morality; this is not reason, this is rationalization. It seems that people interpret the process of logic as a process of looking out for yourself while disregarding compassion for others.

    As well, "The Prisoner's Dilemma" may outline all of the aspects of this study already. If this is the case, the study should have pursued the implications of these things when the Dilemma is iterated. Then again, Richard Dawkins beat the researcher to that anyway, covered in his 1987 documentary "Nice Guys Finish First" with his discussion to a British psychologist. The implications are marvelous, but I challenge anyone to prove that a person couldn't think of them independently with a little forethought (one of the test subjects actually do using reason.)

  • Steve Porter

    What a great argument for putting the spreadsheets away every once in a while and letting your emotions have some input. Thanks for the thoughtful article.

  • YN Leung

    Thanks - about time we discussed ethics in the context of "bad feelings" and those moral values we all developed as children which now reside in out gut! Years in the political arena show me the results of "group think" with no guts involved. Clear logical analysis is still required once the gut kicks in. Its not an either/or. Those who sensed that something was wrong in the investment debackle and followed their instincts with research are now the winners in the client arena.

  • Daniel Hickey

    A brilliant piece that could not be more timely. It makes perfect sense that focusing on feelings -- and the corresponding guilt associated with unethical behavior -- would give someone pause in making decisions of questionable ethics. Certainly, one could see where focusing on emotion (and, thereby, guilt) might have curtailed the rush on these dubious mortgages.

    However, I think there is an even deeper problem in management decision-making these days. Both the current credit based crisis and the dot.com bubble that preceded it in the early part of this decade reflect a contagion of bad decision-making -- ones that should have been recognized just as easily from a rational vantage point as an emotional one. [Surely, in the cold light of day, the decision to charge exorbinantly high rates to those who can barely afford the payments is no more logical than it was ten years ago to provide millions in venture capital to a teenager with a website and no business plan.] It seems that both the rationale and the ethical decision-making balances that once helped corporate America avoid the pitfalls of excess are no longer operating.

    I look forward to your next thought provoking piece and hope that we see c-suite managers heeding your advice soon.

  • Harry Otsuji

    I heartily disagree with the statistical findings of Chen-bo Zhong. Whether by ratiocination of gut, expressed or tacit, every person acts out of ideology based upin one's world view. For people who act out of their gut, how does the gut perceive what is right and wrong in the first place? How does one'e gut convey to another issues related to matters of ethics and morals? If I grew up in a family with parents who yelled and screamed at me all day long, my gut tells me one thing. On the other hand, if my parents were caring and loving my gut would convey something else. And anyway matters of ethics, of right and wrong ultimately are universal principles. Because 60% of people say that lieing is wrong or vice versa doesn't make something right or wrong. Issues of right and wrong aren't arrived at by taking a poll, or an after the facts statistical analysis, of a small sample, to be applicable to 6 billion people. For me, my gut is an unrealible source of truth and falsity. Frankly, give me my brains, with which I can process concepts such as good and eviland truth and falsity as universal principles, developed by philosophers and the Bible. Trust in your gut and you'll turn out to be obese, because your brains don't have enough substance to tell when to move away from whar's putting on all that debilitating weight. Your gut is telling you a lie.

    Please, to have a meaningful debate about lieing and not lieing, let's put our minds in gear!

    Faithfully yours,

    /s/ Harry H. Otsuji

  • monique lusse

    this must mean that 'dubbya' was the most ethical prez we've ever had!

    gem from molly ivans: Let me say for the umpteenth time, George W. is not a stupid man. The IQ of his gut, however, is open to debate. In Texas, his gut led him to believe the death penalty has a deterrent effect, even though he acknowledged there was no evidence to support his gut's feeling. When his gut, or something, causes him to announce that he does not believe in global warming -- as though it were a theological proposition -- we once again find his gut ruling that evidence is irrelevant. In my opinion, Bush's gut should not be entrusted with making peace in the Middle East.

  • Jacques Werth

    It is often said that people make major decisions emotionally and then justify their decisions with logic. My observation of hundreds of the top producing salespeople, while they were interacting with their prospects and customers, proved that theory to be largely factual.

    Eighty-four percent of those salespeople engaged in a personal inquiry with their prospects, which created an emotional relationship mutual trust and respect. The salesperson was able to establish a relationship mutual trust and respect in and average of ninety-two percent of those cases. They typically terminated their sale process with the other eight percent.

    Those highly successful salespeople had closing rates that averaged four to seven time greater than the average of all salespeople in their industry.

    Of course, there were other factors that also contributed to their extremely high closing rates.

  • Heath Row

    In "Elements of Refusal," John Zerzan refers to linguist E. H. Sturtevant, indicating -- and paraphrasing -- that "since all intentions and emotions are involuntarily expressed by gesture, look, or sound, voluntary communication, such as language, must have been invented for the purpose of lying or deceiving." It seems reasonable that physical reactions -- gut, how we feel -- are more primal than what we think, say, or do. It follows that those thoughts, statements, or actions can be more nuanced -- and perhaps duplicitous or unethical -- than that initial physical response.

  • Madelyn Blair

    This is one of the most compelling arguments for ethics in business I have ever read. It is not that I ever doubted the value of ethics, but this offers a way to communicate value to those run by their 'rational' brains.

  • Fred Nickols

    I agree; your gut is a better indicator of an ethical issue than your brain. Glad to see this published.