There are two over-arching kinds of decision making. One requires research and careful thought as to probable outcomes. The other simply goes with the gut.
It may make sense to stick with the latter in matters of the heart, but a number of recent scientific studies show that in business, the inner voice working in concert with cold, hard information could lead to better decision making.
Neuroscientist Antonio Damasio of the University of Southern California tells us that it is important to pay attention to "somatic markers." Originating in the insula (the island in the brain responsible for social emotions like pride or guilt) and the amygdala (which cues our response to threats), they send messages that something just feels right—or it doesn’t. The more you pay attention to the outcome of trusting your intuition in combination with facts, the better your future decision-making can become.
Damasio tested this theory in an experiment called the Iowa Gambling Task, in which subjects could choose between decks of cards to win money. Among the choices: two "good" decks that turned up consistent profits and two others with riskier cards. Though it took about 50 cards to make a decision to switch decks and 80 cards to explain why, the subjects’ skin was also being monitored for response to stress. The physical reaction showed that after drawing just 10 risky cards, the body was already displaying signs of anxiety, which meant that their feelings were firing signals faster than rational thought.
Though somatic markers aren’t 100% reliable, they shouldn’t be ignored.
More recent research on the complexity of making decisions based on gut feelings is being done by Shabnam Mousavi, an assistant professor at the Johns Hopkins Carey Business School. She is the lead author of "Risk, Uncertainty, And Heuristics," a paper that explores the idea that intuition can be a more useful tool than deliberate calculation in certain situations.
Their research digs deeper into Nobel prizewinner Daniel Kahneman’s work, which showed how often humans elect to make a snap judgement based on intuition, rather than deliberating with available information.
Mousavi proposes that too much information can be just as misleading as a hunch in some cases. One example came from quizzing both German and U.S. students to see if they could guess which city was larger: Detroit or Milwaukee. Score: Germans 90% correct vs. Americans 60% correct.
Because the Germans simply picked the one they’d heard more about and guessed it was the larger of the two. Americans, armed with "knowledge" of these cities didn’t reach for the obvious—and failed.
Though this seems like a simplistic example, the researchers note that given two cities that students had never heard of would have changed the results dramatically. Likewise, some financial newbies have no trouble picking better stocks than a seasoned expert, but give them a portfolio of unrecognizable brands and watch the game change. Which validates Damasio’s theory that the experience of trusting the gut and getting something right or wrong is key in making good decisions.
Mousavi posits that it’s important to take intuitive decision-making one step further by recognizing why people have developed such instincts and the best place to use them.
While business favors doing a cost/benefit analysis and a rational approach before deciding which way to go, in an article for Johns Hopkins’ The Hub, Mousavi recommends an alternative:
Create a decision tree that starts with the fundamental question: "If the worst-case scenario of a proposal were to occur, could you survive?" If no, don't pursue it. If yes, the next question might be whether the company was well-positioned as a first mover in an area. By making each decision sequentially, the company can more effectively limit its information to relevant factors—avoiding information overload and not attempting to quantify the unquantifiable.
When you think about how much data is flying at us at any given minute: over 100 billion emails are sent and received every day this year alone, there may be something to be said for stanching the firehose of information that threatens to clog up our brain with useless facts.
For those still on the fence about a current decision, Angela Jia Kim, cofounder of women entrepreneurs’ network Savor The Success, broke down her thought process for dissecting gut feelings in a previous interview:
- "Do I feel good around this person or choice?"
- "Does this person or situation give me or take my energy?"
- "Do I feel empowered or disempowered?"
- "Am I going toward an adventure or running from fear?"
- "Am I listening to my lessons learned from the past?"
- "Would I make the same choice if I had a million dollars in my pocket now?"
- "Do I feel respected and valued?"
- "Am I trying to control the situation or am I leaving room for expansion?"
From here, it's just a matter of trusting both cognitive and emotional responses to figure out the right way to go.