Is your gut feeling good enough?

Often when I am faced with a decision paralysis caused by loads and loads of data or when I have no reliable information to take a call, I rely on my guts. The question, is your gut feeling good enough, can only be answered if we keep a tab on the outcome of decisions taken on gut feelings vis-a-vis decisions based on hard facts.

On trying to research whether others have the same dilemma, I chanced upon the article in HBR by Laura Huang who is an associate professor of business administration at Harvard Business School. She is the author of the upcoming book Edge: Turning Adversity into Advantage. She has conducted 4 such studies to determine if gut-based decision are intuitive or a subconscious decision based on years of real experience and knowledge.

In these studies she observed hundreds of angel investors and venture capitalists as they considered capital allocation decisions, tracking the extent to which they considered economic, financial, “hard” data, and the extent to which they relied on signals and subtle cues that were based on intuitive, “non-codified” information.

Laura Huang tracked 90 of the companies that investors were considering investing in over time and was able to see several years later whether the investors’ gut feel was predictive of which companies were most successful. What she learned from this study is that those who made more successful decisions based on their gut feel do the following:

  • Recognize that their gut feel is not a separate piece of information but it draws on both objective and subjective information that is already available.
  • Understand that gut feel is not quick, impulsive, and emotional — it’s actually something much more cultivated and nuanced and based on experience.
  • Commit to continually cultivating their gut feel, by paying attention to exemplars, prototypes, patterns, and models in their field and linking what they learn to future decisions.
  • The next time I take a decision based on pure gut, I am now assured that it is not really a wild act, but it is founded on my own experiences and knowledge. It may appear to be action taken at the spur of the moment, but research supports that there is real thought behind it.

    Guys, go ahead trust your guts. I would love to hear your comments. Do you have a gut feel? Have you checked if your intuition proved to be right?