When to Trust Your Gut and When to Second-Guess Yourself
Successful entrepreneurs are often credited with incredible instincts that enable them to capture opportunities others miss. It’s true, you likely have a keen business sense and well-honed professional intuition that help you make decisions more quickly. But your “intuition” is likely the result of accumulated knowledge, past experiences, your unique perspective and even previous intentional thinking, not magical insights that don’t require vetting.
Intuitive decision making may look like black box magic, but it is built on a lifetime of stored understanding and experience. Which helps explain why founders often feel they can trust their instincts; you know your business inside and out. But unchecked intuition can also be a clever disguise for over-confidence, personal bias and a lack of critical scrutiny.
The teachable gut
Nobel Prize winning economist Daniel Kahneman and psychologist Gary Klein, the author of Intuition at Work, studied the benefits and drawbacks of going with your gut to make business decisions. They found that certain conditions make instincts more useful and reliable, and others just make leadership by gut risky and foolish.
“You need to take your gut feeling as an important data point, but then you have to consciously and deliberately evaluate it, to see if it makes sense in this context,” Klein shared in an interview with McKinsey & Company. Kahneman agreed, saying, “When you are under time pressure for a decision, you need to follow intuition. My general view, though, would be that you should not take your intuitions at face value.”
One of the best ways to use intuition effectively is with what Kahneman calls a “learning focus.” If you want to jump in quickly to take advantage of an important (and perhaps fleeting) opportunity, you must also precisely track results in real time so you can learn as you go and quickly adapt. Where business owners and corporate leaders often go wrong is sticking to a plan even when early indicators suggest it’s not working.
Your willingness to remain open to ongoing feedback, evaluate unfolding results and maintain a learning focus are key to making effective use of intuitive expertise.
Clouded by desire
Candid evaluation of early results can also be obscured by your sheer desire for things to work out in the way you imagine them. Writing in Fortune about the dangers of gut instinct, Glenn Laumeister, CEO of AllWork and serial entrepreneur, said, “When you want something so badly and your entire world revolves around making it happen, your emotions take over, and you end up running a decision-making process no longer based on facts, but on a false reality.”
Check your gut
Kahneman, Klein, Laumeister and others suggest a range of strategies to test gut feelings against objective data so you can embrace, revise or discard as needed. Consider their advice about when to trust your gut:
- Be highly suspicious of your intuition in unfamiliar situations because you lack the strong foundation from which valid instincts realistically emerge.
- Always seek objective feedback to test your gut and be on alert for overconfidence.
- Apply the “premortem” technique developed by Klein to consider how a project might go wrong before you start. In contrast to a postmortem where you look in hindsight at how things failed, ask yourself and others to look into a crystal ball to conjure up all the ways the project went wrong and failed before you even start. This will allow you to make adjustments or pivot.
- Use checklists to ensure you review critical elements each time before making important decisions. Kahneman puts the quality of information being used to assess a situation high on his list of critical elements.
- Look at the numbers realistically and always vet financial data with logic.
- Watch for instincts masquerading as bias. Especially in hiring decisions, we often recruit, hire and promote people who are very much like us, rather than the most qualified person or someone who will bring new perspectives.
- Get more comfortable having your judgment questioned. Inviting colleagues, direct reports and mentors to question the validity of your ideas can prove incredibly valuable in identifying shortcomings before they harm your business. Laumeister writes down a list of five pros and cons that support or refute a decision he is considering. Then he shows it to someone he trusts who has no stake in the outcome to get a reality check.
You can expand your learning focus at the Global Supplier Diversity Conference (GSDC) September 23, 2021 streaming live to your location. This incredible program is offered with complimentary registration for women and underrepresented founders. GSDC 2021 will provide critical information from amazing speakers such as senior executives from Microsoft, GSK Consumer Healthcare, the U.S. Small Business Administration, the Atlanta Hawks, successful entrepreneurs and many others. REGISTER today and attend live from your office or home.