Here’s a little advice on decision-making from one of America’s founding fathers and most esteemed thinkers:
“If you doubt, set down all the Reasons, pro and con, in opposite Columns on a Sheet of Paper, and when you have considered them two or three Days, perform an Operation similar to that in some questions of Algebra; observe what Reasons or Motives in each Column are equal in weight, one to one, one to two, two to three, or the like, and when you have struck out from both Sides all the Equalities, you will see in which column remains the Balance. […]
This kind of Moral Algebra I have often practiced in important and dubious Concerns, and tho’ it cannot be mathematically exact, I have found it extremely useful.
By the way, if you do not learn it, I apprehend you will never be married”.
I am ever your affectionate Uncle,
As funny as this recommendation of Benjamin Franklin to his nephew, who was trying to find his match in 1779, might sound, we have to wonder how much this thinking still holds true in our times? We like to see ourselves as rational, logical decision-makers who are able to analyse the pros and cons and, thereby, achieve a decision that holds the maximum benefit.
The model of the rational decision-maker, the homo economicus, is the antiquidated assumption of economic theory and lots of research is still implicitly based on this economic theory. But this model really only works (1) in a world with known risks and (2) based on the assumption that it is our cognitive mind that actually makes the decision. The fact is that most of the time this is not the case.
Our world is more than ever full of unknown risks and unpredictability and, on top of that, research into the human brain and decision-making has taught us that 95% of the time it is our subconscious, implicit mind that is sitting in the driver’s seat.
So, as we make around 20,000 decisions every single day, it seems a worthwhile question to explore: Should we be spending our time on performing ‘Benjamin Franklin operations’ or is there a more effective way to make better decisions?
By way of a further example, Dr Gerd Gigerenzer, director of the Centre for Adaptive Behavior and Cognition at the Max-Planck-Institute, Berlin, shows us that the power of intuition is dramatically underrated and it is in fact intuition that can enable better decision-making – if we are courageous.
So, what is intuition?
According to Gigerenzer, intuition is felt knowledge and can be characterized by three things:
- It is quickly available to us in the situation
- Its reasons remain unconscious
- And it guides many of our decisions
This is, for example, when we don’t sign a contract because “it just doesn’t feel right”.
In summary, intuition is ‘subconscious intelligence’ and often tells us what to do. It is particularly effective the more experience we have in a respective field, because it is based on accumulated past experience; in other words, past memory patterns.
According to this, it is rational for a manager with many years of experience to listen to their gut feel rather than trying to incorporate too many factors into their decision, particularly when there are many unknown variables, unpredictable dynamics and few reliable data that are predictive for the future.
What happens when we interrupt intuition, by getting someone to consciously think about their craft? The German soccer team used this strategy in the 2006 World Cup.
Jens Lehmann was the German goalkeeper in the penalty shoot-out that would decide the winner of the game. The pressure was on. The trainer gave Lehmann a piece of paper and Lehmann wandered back into the goal, holding this piece of paper, simulating he held an important strategic information about the player that was about to attempt the penalty. The objective was to disturb the intuition of the striker. Although there wasn’t even any information on the paper in Lehmann’s hands, the striker performed poorly, Lehmann saved two shots and the German team won.
So one recommendation for the year ahead would certainly be to trust your gut instinct more, because often, it is actually the most intelligent guide we have.
When can intuition be misleading?
On the other hand, I recently had a fascinating discussion with my neuromarketing colleague Dr Peter Steidl about how intuition can increasingly mislead decision-makers. If we go back to where intuition originates – which is past memory patterns – we have to ask ourselves how it is likely to mislead when the operating environment changes dramatically as there won’t be any relevant memory patterns, thus leading to poor decisions.
Marriage, brand strategy, breakfast cereals: In which situations should we listen to our intuition and how do we overcome the described challenges in organisational decision-making without performing meaningless ‘Benjamin Franklin operations’?