Gut Decision or Rational Analysis

The debate rages over whether gut reaction or rational analysis is the key to effective decision-making. Over on BrainBased Business, Dr Ellen Weber highlights various recent discussions on Why Gut Reactions Work Without Rational Support, specifically citing the work of Dr. Gigerenzer, director of the Max Planck Institute of Human Development in Berlin. In discussing the support for his perspective, he notes the role of intuition, of hunches, in scientific research.

On the flip side of the argument, we might want to give credence to the work of Harvard Business School professor Max H. Bazerman, author of Judgment in Managerial Decision Making. In an article in Harvard Management Update May 2007, he explains why intuition can be fallible in a high-stakes decision. Scientific test of intuition show a heavy influence of various cognitive biases - in particular, overconfidence, "anchoring" judgments to a piece of information that may or may not be relevant, and a tendency to overweight recent or "vivid" data.

Setting aside the question of whether the analysis themselves are being done objectively, perhaps the question is better presented as what are the relative roles of intuition and rational analysis in a decision? Does it depend on the "stakes" of the decision as suggested by Bazerman? In either case, when rational analysis and intuition disagree, then what? Using both rational analysis and intuition provide you with a tremendous amount of information. When the conclusions disagree, you have even more information at your disposal. Where are your biases? Are they pointing to incorrect assumptions in the analysis? Are they suggesting an inconsistency in your objectives? Rather than dismiss one over the other, a disagreement calls for serious reflection and perhaps the need for additional support.

Adapting to Change

An earlier blog was about “Decide to Change”, yet often change is thrust upon you. It could be a reassignment, promotion, family/life event, company sale, accident, or health crisis. Unless the event is so dramatic that you are stopped in your tracks, your brain will try to force-fit habitual thoughts, actions, perceptions and decision-making approaches to the new situation.

In moving out of your comfort zone, decision-making ability tends to suffer. Do I do this or do that? I’m being asked to do something that I don’t want to do. I’m able to operate more independently, but I’m not sure I’m comfortable with it.

A quick trick to help you adapt is to create some new rules. Your strengths haven’t changed. Your values haven’t changed. If you can create a set of rules around what to do, and what not to do, you will move more quickly back to a steady state, and stay true to your strengths and values.

For example, early in the development of my business, opportunities were being presented that didn’t feel right, yet I was reluctant to turn anything away. Instead, I wasted energy thinking about and talking about the opportunities, but not committing to making them a reality. A set of criteria for evaluating opportunities helped me make clear decisions about the ones that didn’t feel right, and released me to pursue those that did. Think about the criteria in the form of an open-ended statement. Examples might be:

• I will make decisions without consulting my manager when ...
• I will set non-negotiable boundaries with my teenagers when ....
• I will go to networking events when ...
• I will pursue new job options when ...
• I will leave this job when ....

Having the criteria in place relieves the burden of guilt, uncertainty and discomfort. Having the criteria in place does not lock you in; rather it may lead you to a place where you need to re-evaluate your criteria, add a new one, or make a decision. In any event, by giving yourself rules on when to act or not, you have given yourself additional mental energy for creating the new habits of thought and action needed in the change.

Share with us where you have found criteria helpful in your life.