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About prateekchaturvedi

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    Indian Institute of Management Ahmedabad
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  1. Hi Vishwadeep, I am trying to bring in the concept of "informed intuition" or "validate intuition". As mentioned by you there can be two cases: 1. Decision following intuition: But I would say that it doesn't imply that I do not care about data. This, in my view for most of the times, will be "informed intuition". You gather the data, analyze it and you reach a position which is not your destination yet. Data will take you closer to decision, but then as a decision maker one will have to trust his/her intuition and take the small leap from that informed position. I would not want to say that the decision was just a gut feeling - at least not in this context where we are talking about decision makers using DDDM or not. 2. Decision based on gut feeling - but validation/followup of intuition through data: Here, I would want to say that although decision may be taken based on gut feeling - the decision maker may do so just because of absence of appropriate data. But, then with the decision taken, he/she may want to validate or followup on the post-decision results so as to help him/her in decision making in future as well. I am coming from the thought process, in this case, where data analysis may not be appropriate right now - but using data collection and analysis may help in future. I would say that evidence does not lead directly to action without leading through judgement. And, the extent of usefulness and effectiveness of dependence of evidence and expertise would be contextual.
  2. I tried to keep the topic neutral because neither did I want one to decide against reading the article based on gut feeling nor based on previous data analysis of topics. I myself am a firm believer of the two approaches; however, I believe people tend to take either of the sides without realizing that the two approaches are not at odds. A situation that is frequently cited by proponents of use of intuition for management is when the decision-makers do not have access to extensive data. This may be the case when the environment has changed significantly (a simple scenario that may be relevant at an individual’s level can be a decision to invest money). The decision in such situations may not seem to be driven by data due to non-existence of structured data. However, what often seems like intuition is well-rehearsed behavior that comes from the years of experience. Not being able to present a pattern or inability to articulate a recognized pattern (in cognition) does not imply that it is a gut-based decision. The cognitive pattern is built upon the extensive data of experience and knowledge accumulated over the years by the decision-maker. However, data-driven decisions may not always be the way out of a situation. People who are not brain-washed or are not entirely influenced by the data can see things in an entirely different perspective and can generate ideas that expertise may drive out of one’s brain. This may be seen in situations of business crisis – where to turnaround a business the top management is changed and new people from within the company or outside is brought to bring in an entirely fresh perspective. The problem with gut feeling is that we all already know of a lot of cognitive biases and related flaws which may impact the decision making. There is a lot of research that would yield “gut-feeling†approach to be highly susceptible to these flaws: confirmation bias – one’s difficulty in believing and remembering evidence that contradicts one’s beliefs fallacy of centrality – this is very important for the decision-makers to understand where they believe that they will know about anything and everything that is important. Although I believe in gut-feeling, the biases make me apprehensive of using the same for decision making – I fear my unknown biases creep in the decisions. Thus, intuition, according to me, works only for the people who act on their beliefs, but always doubting what they know. Such decision-makers would always be on a look-out for some contradictory evidence. This would in turn create an environment where others around them would also challenge their beliefs and result in constant updating of the “basis†of intuition. Few decision-makers that may fit this particular mindset could be Brad Bird from Pixar and Andy Grove - CEO of Intel. However, there are other interesting cases which, unlike the popular belief, have had seen errors in their judgment or in decisions based on gut-feeling. Steve Jobs made this mistake. Google believed that they were going to crush Firefox with Chrome, but it has not happened. The market share of Chrome still remains modest. This is not to bring anything negative about these two decision-makers or others. All of them have extremely impressive track records, but needless to say their experiences also include some failures which are usual for a human as well as a human-run organization. We need to understand that there are conditions where judgment may fail, and it holds true for the best of the leaders and managers. As is the case for intuition, similar arguments would hold true for data-driven decisions where decisions solely based on data may fail in absence of intuition. Finally, in my view, gut-feeling and data-driven analyses do not oppose each other. These may be looked at as tag team partners to achieve the best decisions. Hunches may be necessary to generate the initial hypotheses or even alternate decisions, but evaluating the same based on hard evidence (both quantitative and qualitative data) would help to achieve better results vis-à -vis decisions solely based on hunches and ingrained behaviors. Following gut-feeling mindlessly may result in believing that the process is impervious even after observing clear signs of failing. The gut-feeling may be captured in the qualitative data analyses, but in a much more structured and streamlined manner which also helps in easy identification of a pattern and repeated usage of the same, if required. To be driven by gut-feeling does not imply foregoing the advantage that structured data can provide. A move towards data-driven decision making while not shifting from the gut-feeling process is important in this highly dynamic environment. References: http://bobsutton.typepad.com/my_weblog/2009/11/intuition-vs-datadriven-decisionmaking-some-rough-ideas.html Note - Visitors shall not be able to comment on this article until they are logged in.
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