The DataHero Blog

The Science Behind Gut Feelings and Making Data-Driven Decisions

July 31st, 2017

Star Trek fans know that Captain Kirk is decisive and acts on his gut feelings. Sometimes he’s right, but other decisions lead to disaster.

Mr. Spock, on the other hand, is logical, dispassionate and usually opposed to Captain Kirk. They each make mistakes as individuals, but as a team, they bring their strengths together to make better decisions.

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When we make data-driven business decisions, we mistakenly think that it is purely a logical process devoid of human emotions and feelings. But the reality is that we make more effective decisions when we combine our cognitive and emotional senses.

Instead of a data-driven mindset where data is all that matters, better decisions are made when data is used to inform your other inputs including emotions, past experiences, judgements and business context.

We are all accustomed to using our brains to assess options, but learning to listen to our bodies can improve our decision making skills.

How Gut Feelings Guide Cognitive Decision Making Skills

We all have experienced a ‘gut feeling’. In the pit of our stomach we know we are right about something, but don’t quite know why, and don’t have the data to back it up. This isn’t just our stomach making us feel bad, it’s actually our second brain telling us something important.

This physiological reaction is called interoception, and it not only stems from the stomach but also the heart, lungs, bladder, bowels, skin and other organs.

The physiological changes throughout your body such as facial expressions, heart rate, nausea, etc., are relayed to the brain where they are transformed into an emotion that tells you something about the stimulus that you encountered. For example, when you have to deliver bad news to your boss, your heart races because you are nervous. But your racing heart then makes you feel nervous, causing a positive feedback loop.

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A recent study on interoception found that people who are attuned to sensing these body sensations are best able to survive and thrive in their environments, including at work. People with greater sensitivity to their body as measured by, for example, tests of heart beat detection perform better in laboratory studies of decision making skills.

Over time, your bodily sensations become associated with particular situations and their outcomes. When you make a subsequent decision, your gut feelings are consciously or unconsciously associated with past outcomes, and therefore influence your decision making in favor of the positive result.

Interoceptive Accuracy Translates to Successful Decisions Making Skills

Researchers examined whether a financial trader’s decision making skills were associated with their ability to sense their internal bodily signals.

The scientists visited a trading floor and asked eighteen hedge-fund traders to tune into their bodily system by silently counting their heartbeat, while the researchers tracked their actual heartbeat. The closer the trader came to matching their perceived and actual heartbeat, the higher their interoceptive accuracy.

Here is what they discovered:

  • Finding #1: Traders, who need to make big decisions every day showed above average ability to sense their internal bodily signals when making decisions.
  • Finding #2: Interoceptive accuracy scores predicted trading success: Those with higher interoceptive accuracy demonstrated higher profitability than those with lower accuracy.
  • Finding #3: More experienced traders showed a more uniform ability in accurately detecting internal bodily signals, while less experienced traders showed more variability.

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As you experience and recognize how you feel in a wide variety of situations, you become more aware of how your body reacts to positive or negative indicators when making decisions. The more you pay attention to the outcome of trusting your ‘gut feelings’ in combination with experience and facts, the better your future decision making skills can become.

Without Your Emotions, You Actually Can’t Make Good Decisions

In neuroscientist Antonio Damasio’s book Descartes’ Error, he tells the story of his patient, Elliott.

Elliott was a smart, successful businessman with a happy marriage. Unfortunately, doctors found a tumor in his brain, which had to be removed. He underwent neurosurgery and lost a part of his brain — the orbitofrontal cortex — that connects the frontal lobes with emotions. He became a real life Mr. Spock unable to feel emotions.

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You’d think that becoming completely rational would be beneficial in making optimal decisions, but the opposite was true. After losing his emotions, Elliott became ineffective at making good decisions.

Despite remaining in the 97th percentile for IQ, he lacked all motivation and became paralyzed by every decision in life. He lost the coupling of bodily arousal with decisions; and even though he maintained normal intellect he suffered a recurrent failure to learn from negative feedback. He lost his wife, his job and his savings from bad decisions.

Elliot’s lack of emotional drive made him unable to determine the value of one thing over another. He couldn’t do anything on a schedule or manage his time. He was unable to prioritize tasks, spending too long on one thing or drifting onto another.

It turns out, our gut feelings are not only valuable guides when making decisions, they are essential.

Forget Data-Driven. Make Data-Informed, Gut-Based Decisions

We like to think data-driven decisions are formed by a rational, cognitive process within your brain. But when you are presented with complex or conflicting information, your cognitive abilities often become overloaded. At this point, your gut feeling takes over to guide you towards the best decision.

Data and our gut should go hand in hand. Data informs the decision, but decisions can’t be made in a vacuum of data. At the same time, decisions based purely on emotion should always be supported by data.

The reality is that our decisions are not driven by data, they are informed by data and based on several variables beyond data, including somatic markers (intuition), past experiences, judgement and context.

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How Data Visualization Can Activate Your Gut Feelings To Solve Problems

Our interoceptive sensations start firing when we encounter a stimulus that requires our attention. When you get a result within your data that doesn’t “feel right”, one of the best things you can do is visualize the data to look for outliers that are skewing the result.

For example, let’s say your marketing manager presents the below chart to request an increased budget to invest more in the ‘sweaters’ keyword, but when you review the chart something doesn’t feel right. The sweaters keyword has the most impressions and clicks by far, so it seems logical to pump more money into it.
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While the data is right, the decision to invest more doesn’t pass your ‘gut check’. In addition to the immediate emotional response, your past experience tells you that you’ve never seen a keyword outperform the others at such a high-level. You also speculate that ‘sweaters’ is a general keyword that might be getting a lot of wasted clicks.

You ask your manager to run a report on conversions to make sure ‘sweaters’ clicks are converting into sales. You want to use all the data at your disposal to either support or disprove your gut feeling before moving forward.

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Based on the conversion report, you learn that sweaters has extremely low conversions despite having the most clicks and impressions. The sweaters keyword is a bad investment. By visualizing the data in a tool like DataHero, you can quickly identify outliers or inconsistencies that elicit both rational and emotions reactions.

Here are some approaches to ensure your decisions are data-informed and gut-based:

  • Visualize your data. The human brain processes images 60,000 times faster than text, enabling your entire body to react to the stimuli.
  • Find a balance between data, your expertise and gut-feelings. Use your data to support your instincts and vise versa.
  • Put data in context of your business objectives. Create a hypothesis, which remains to be proven until you test and question it in order to draw conclusions.

For The Best Results, Data and Your Gut Must Work Together.

While data informs, it can’t make the decisions for us. In today’s complex, ambiguous business environments, you need all the help you can get to make good business choices.

Fortune Knowledge Group study reported that 62% of business executives felt it was often necessary to rely on gut feelings and other soft factors when making decisions versus solely relying on data. Great business leaders learn to trust their gut, but only after they’ve gathered enough intelligence through data analysis to make an informed decision.

By Walter Chen

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