Intuition and Decision Making

Use your intuition and decision making becomes a lot easier. Well, many people believe this but is there any truth in it, and does it help you to make good decisions? More recent research into decision making has concentrated on how people actually make decisions.

The classical view, based on a rational decision making model, is useful but does not fully explain how people actually make decisions. Rather, psychologists are suggesting that decisions are often made based on much more subjective criteria. These include a combination of judgements, tacit knowledge, intuition, and heuristics (simple and approximate rules or short cuts).

This article is part of our series on decison making. The first article, Types of Decision Making, introduces a range of decision making approaches. This article discusses one of these in more detail and considers the relationship between intuition and decision making, and some of the more recent thinking in that area.

The "Process" of Intuition and Decision Making

Approaches to decision making can be quite diverse, ranging from classical, rationalistic, decision making processes to a less structured, intuitive, decision making style.

Rational decision making processes consist of a sequence of steps designed to rationally develop a desired solution. Intuitive decision making is almost the opposite, being more instinctive, subjective and subconscious in nature.

One of the principle assumptions of the rational decision making process is that human beings make rational decisions. However, this is not always the case! There are usually wide ranging factors which determine our decisions, many of which are not rational. This is especially so when we remember that management is about dealing with people. In addition, many situations require decisions to be made with incomplete and/or insufficent information. Often management requires quick decision making, or judgements made under pressure.

It is in this context that a more intuitive approach often develops. All except the most mechanistic of rational decisions must include some element of subjective judgement. Our decisions are based on judgements which are affected by a range of factors including our experiences, values, attitudes, and emotions. Judgement heuristic decision making uses simple rules and approximate short cuts to help us arrive at decisions. Drawing particularly on our experiences and attitudes, it does this by helping us to cut through the excessive information that can overload and delay decisions.

Whilst useful in helping us to simplify complex situations, we must also remember that the subjective nature of heuristic decision making must also introduce elements of bias. This can be illustrated in the different types of judgement heuristics. For example:

Representative heuristics - where judgements are made on the basis of things with which we are familiar, or inferred from "representative" characteristics;

Anchor heuristics - where decsions are based on an anchor like a "value" and then adjustments are made from that start point;

Availability heuristics - where judgements are built on the information that is readily available, or on easily recalled memory/experience.

It's interesting to relate this theory to the work of successful manager and author, Jack Welch. Hailed as "manager of the century" by Fortune, Welch describes his approach to decision making in this quote:

"Sometimes making a decision is hard not because it is unpopular, but because it comes from your gut and defies a 'technical' rationale. Much has been written about the mystery of gut, but it's really just pattern recognition, isn't it. You've seen something so many times you just know what's going on this time. The facts may be incomplete or the data limited, but the situation feels very, very familiar to you."

Welch captures the essence of intuition and decision making. In contrast to rational decision making, intuitive decisions are less structured and involve feelings and perceptions rather than analysis and facts. Welch's approach summarizes other theoretical elements of intuition and decision making. These include:

Pattern recognition - where configurations and relationships are recognised in information and events;

Similarity recognition - where similarities and differences, in past and present situations, are identified;

Sense of salience - recognising (or assuming) the importance of events and information, and the affect this has on judgements.

Making "Sense" of Intuition and Decision Making

As managers trained or educated to be rational thinkers, we may be wary of combining intuition and decision making. However, academic research into decision making theory indicates there is a sound logic in reconciling the two. This is particularly important when we remember that decision making is rarely a precise, safe, fully informed process. Though not useful in every situation, whererever there is any ambiguity or doubt in our decision making, then there may be a place for intuitive thinking.

An interesting area of development relating to intuition and decision making, is the work on sense making from organizational theorist Karl Weick. Weick's work relates to our discussion of rational and intuitive perpsectives, particularly the inclination of managers to think rationally about decisions. This despite the fact that these decisions are based as much on what they don't know as on what they know! In such circumstances there is much to be said for decision making informed by intuition or heuristics. Weick suggests:

"When people create maps of an unknowable, unpredictable world, they face strong temptations towards either over confident knowing or overly cautious doubt. Wisdom consists of an attitude towards one's beliefs, values, knowledge, and information that resists these temptations through an on-going balance between knowing and doubt". 

"The essence of wisdom is in knowing that one does not know, in the appreciation that knowledge is fallible, in the balance between knowing and doubting."

Perhaps this is only highlighting what great managers know already. As Bob Sutton suggests:

“the best leaders have the courage to act on what they know right now, and the humility to change their actions when they encounter new evidence. They advocate an 'attitude of wisdom'. Arguing as if they are right, and listening as if they are wrong.”

Determining which type of decision making approach to adopt is essential for effective decision making. However, perhaps knowing how and when to combine rational and intuitive approaches is essential for effective management.

A valuable final thought on types of decision making is illustrated in this video clip of Malcolm Gladwell. Here he persuasively discusses rational and intuitive decision making. He argues that "decisions made very quickly can be every bit as good as decisions made cautiously and deliberately."

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