Running a business calls for a lot of decision making. Some decisions are routine, simple to make and are well supported by information. Others are more complicated. There is information and analysis to support the decision. Yet, somewhere deep down you are inclined to make a different one.
Call the feeling gut-feel, intuition, instinct, or judge ment- all the same. So how accurate are our gut-feelings? That’s important to know since they play a part in many major decisions. This article looks at how much we should rely on our gut-feelings while making decisions. And what to be wary of while making such decisions.
What exactly is a gut-feeling? The brain is a predictive machine. When you come across new information, your brain tries to compare it to past experiences and knowledge. And, on that basis, tries to predict the outcome of a current experience. A gut feeling is when this matching happens at a sub-conscious level. You are not aware of why you have the feeling but be sure that your brain has used information to give you that feeling.
So, your gut feelings have a basis. But are they reliable? You can and should rely on your gut feelings, subject to the following
You have done your Analysis
It’s important that you do not disregard information available to you. Analyse (but don’t over-analyse!) data and information available while deciding. When your gut feelings and analysis sync, your decision making become simpler and more effective. Analysing data is particularly important when making significant decisions such as deciding your business strategy and resource allocation.
You have Experience
Every decision we take has implications. The experience with past decisions gives the brain more information. This information is crucial for the brain’ predictive capability. So, a good question to ask yourself when taking a decision could be- Do I have experience in making similar decisions? If you do, your gut-feel is probably pointing you in the right direction.
You’ve run through potential biases
We all have our biases. Unfortunately, we are not aware of most of them. It helps to run through some common biases to check whether they are impacting our decision. This link has an exhaustive list. The three critical ones are
- Confirmation bias: Don’t cherry pick information to suit the decision your gut is telling you to make. When analysing information, use all the information available.
- Bandwagon effect: Everybody has a view. Several peers you know, and respect might be pursuing a certain path. That isn’t necessarily the best path for you. Don’t make a decision based significantly on what others are doing. That doesn’t mean that you need to share views. It only means that you objectively see which parts of it are relevant to your decision and business.
- Conservatism bias: Keep updating that brain of yours. That means letting go of past views in the face of new evidence. That also means that we shouldn’t be overconfident of our gut feelings. The gut feeling machine needs to keep getting updated!
To conclude, your gut feelings are incredibly important. Keep listening to them. Only make sure that they are not the sole source of your decisions. And keep updating the software by taking more decisions. Most importantly, learn from the results of your previous decisions.
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