The DataHero Blog

In A Data Era, How Does Your Gut Fit In To Decision Making?

November 11th, 2014


Do you have those times when data speaks louder than your gut?  We’re wading into the murky waters of decision making based on your gut. As data analysis becomes ever-more pervasive, accessible and expected at every level in an organization, we may feel a little lost on the best way to make a decision. This is especially true if the data and intuition are in conflict. Which method is best? Do we follow our gut or do we dive  into the data? As with so many questions in our everyday jobs, the answer is: it depends.

Pros of Going With Your Gut

There are some times when it is advisable to go with your gut in decision making. Daniel Kahneman, author of “Thinking Fast and Slow”, and Gary Klein, a research psychologist famous for his research in naturalistic decision making, agreed upon a few key times when trusting intuition is advisable. These situations include time crunches and oft-repeated situations. Of course, making a decision based on intuition is generally faster than wading through data analysis. Secondly, if you find yourself in a situation that is similar to one you’ve dealt with numerous times before, go with your gut. Be careful though, this idea of experience providing you with super-human intuition will come up later.

The point here is, we all know those individuals who have to analyze stacks of spreadsheets before making a relatively small decision. No one wants to be that guy that holds up the entire project because of one data point we’re missing.

Why Trusting Your Gut Is So Tempting

There’s a pervasive idea in business that leaders have experience and wisdom behind them, and thus need to rely on data less. What an alluring idea, that once we get to a certain point in our careers, we no longer need to rely on data analysis. Our intuition will make us unique, smarter, and more valuable to our organization, and it lifts us above those mundane spreadsheets. In fact, the CEO of Johnson & Johnson, Ralph Larsen was quoted as saying “Very often, people will do a brilliant job up through the middle management levels, where it’s very heavily quantitative in terms of the decision-making. But then they reach senior management, where the problems get more complex and ambiguous, and we discover that their judgment or intuition is not what it should be.”

Another incredibly tempting argument for siding with your intuition is the ease of the decision-making process. Is this question too complex? Do we not have the data to support it? Just kick it to your subconscious and trust that it will work out the kinks and provide us with the best possible answer.

Cons Of Going With Your Gut

Of course, there are some definite drawbacks to trusting your intuition too much. Experts are often overconfident about their abilities to make accurate decisions. In fact, leaders are frequently selected for their ability to set others at ease about their own decision-making. A leader who is unsure and wavers too much on decisions is not considered a strong leader. Thus, office politics and the tendency for others to follow leaders even without sufficient basis, is a significant pitfall in intuition-based decision-making.

Thinking that you are an expert in your subject matter is very alluring, which can tempt you to neglect what the data is telling you if it conflicts with your preconceived ideas. This leads to some of the seduction of chalking your decisions up to intuition.

What Does This Mean For Me?

We all know that there is no hard and fast rule on decision-making. Sometimes it makes sense to follow your intuition, sometimes you have to trust the data. What we can we do then to ensure that we minimize the wrong decision-making, either way we choose?

First, to avoid putting yourself in a situation where you’re forced to go with your gut because you lack the right data, set yourself up for success. Track the metrics that matter to your business beforehand. This does not mean pulling in every single data point you can possibly imagine. More data will simply lead to analysis paralysis. Instead, empower your employees to be able to analyze their own data, and make their own data-informed decisions.

Second, test your judgments. You may even want to record a few different times when you’ve gone with your gut, send yourself an email outlining the situation and why you chose the decision you did. You may be surprised by how far off your gut was.

Third, conduct a “pre mortem” analysis. Before you begin a large project or make a decision, ask your team what could go wrong before you begin. This challenges team members to look for possible holes, and thus strengthen the plan to address these holes before you fall into them.

Finally, don’t let politics trump data analysis. This is a larger cultural idea to keep in mind. You don’t want an organization made up of only followers. Encourage a culture in which it’s okay to challenge preconceived ideas and methods.

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By Kelli Simpson

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