Check Your Gut: Intuition and Its Limitations
Article Highlights:
Our intuition is critical when making timely decisions, but can fail us when relied upon exclusively.
Adopting a data-driven mindset is a way to work with our intuitive assumptions in a structured way.
When it comes to leadership, intuition is key. By definition, intuition is an instinctual reasoning process that stems from one’s learnings (i.e. formal/informal education) and lived experiences. Intuition is particularly critical for decisions involving considerable uncertainty and/or missing information, and unsurprisingly has been cited as a key factor in some notable business decisions.
When we arrive at decisions driven solely by our intuition, we often use unconscious rules-of-thumb or mental shortcuts, especially in situations when we do not have the definitive information needed to make a decision with certainty. These mental shortcuts are valuable because it would be incredibly demanding, almost paralyzing, to process every piece of information – significant or trivial – in order to make a decision.
There are three primary ways in which we employ mental shortcuts when faced with complex decisions:
When trying to make a decision based on the chances that some event will happen, we tend to weigh the first event that comes to our minds so strongly that it leads us to believe that the event happens more often than it actually does. Consider this question: are there more words that start with the letter ‘k’ or more words that have ‘k’ as the third letter? While most people believe there are more words that start with ‘k’, the answer indeed is that more words have ‘k’ as a third letter. We tend to make this error because it is easier for us to think of words that start with ‘k’ as opposed to words that have ‘k’ as the third letter. Simply put, an event that is ‘front-and-center’ in our mind leads us to an unfounded conclusion that the event is more likely to occur. The reason this mental shortcut is problematic is because what is ‘front-and-center’ will vary greatly based on individuals’ experiences.
In the same type of situation when trying to assess the chances that an event will happen, we have a tendency to strengthen our expectation that lower probability events will happen (i.e. death by plane crash) and ignore more common and likely events such as death by cardiac arrest. Put another way, we tend to vividly remember when truly extraordinary (and lower probability) events occur which feeds into a false belief that these extraordinary events are typical.
*Note that these two types of shortcuts are very similar in nature and it could be that both are in play at the same time.
In situations where we need to decide on a starting point or value, we generally pick a subjective starting point (“anchor”) and then make adjustments based on relevant factors until we feel satisfied with the resulting value. The best example of this is during a car negotiation. Imagine before buying a used car you did some hasty research and came to the conclusion that $5,000 is a reasonable price to pay for the type of care you are interested in. When you arrive to look at the car, the seller tells you she is expecting $10,000. In this scenario, you are more likely to hold onto that first number ($5,000) and make slight adjustments that end up closer to your $5,000 anchor, rather than being open to considering if $10,000 was indeed a great deal. The issue here is that people tend to remain steadfast about their anchors even when they aren’t accurate, so the ‘adjustments’ we make are actually weak relative to the anchor, leading to systematically biased results and oftentimes, poor decisions.
Our use of mental shortcuts presents a double-edged sword to intuitive decision making. On the one hand, we need these mental shortcuts to navigate decisions efficiently when we cannot possibly have all the information. On the other hand, relying too much on unconscious processes leaves us prone to biases in the important decisions we are undertaking.
As leaders, we all have probably used intuition to make some important decisions. If we know that intuition is subject to bias then we may ask ourselves, how can we leverage our intuition while ‘guarding’ against biases? One practical way is adopting a data-driven mindset which offers a structured, systematic way to test assumptions using the unlimited data most of us have at our fingertips. Over this blog series, we’ll explain how to think with a data-driven mindset—from formulating a research question, to thinking critically about the data—that can help answer your question and ultimately elevate data into your decisions.
This is one of several forthcoming pieces in Hawai‘i Data Collaborative’s Data for Good Decisions Series. The purpose of this series is to showcase how to elevate data into important policy and social change decisions to solve challenging problems.
