We’ve all got intuition, we sometimes call it gut feeling, common sense or instinct. A song you were humming comes on the radio, the phone rings and you just know it’s an old friend you haven’t spoken to for months. But for every instance you guessed it right, there were probably times you got it wrong.
Using intuition to make business decisions has the same probability:
Sometimes you’ll get it right, sometimes you’ll get it wrong.
As we make decisions, we never know for sure if they are going to be the right ones or the wrong ones. In business, we owe it to ourselves, our business and our colleagues to go about making decisions in a logical and rational manner.
Intuitive decisions are based off our own memories and experiences. Using our minds as an internal super computer. However, in today’s rapidly changing environment, this can prove an uncertain approach. A rational consideration of the facts, alternatives and likely outcomes is a sounder framework in complex situations.
Decisions based on facts can be monitored and evaluated through later analysis. Whether the alternative selected was the right course of action, or the wrong one: you will have criteria on which you can assess the result. If you are off course, you can take corrective action and reset your trajectory. With decisions based on gut feel alone, it is much harder to pinpoint what needs to change.
DECISIONS SHOULD BE:
Based in logic
Able to be evaluated
Able to be communicated
Using a logical decision making process also allows us to communicate the reasons behind tough decisions. Telling the Head of Production he needs to let go of five factory workers is much easier if you can talk him through the alternatives considered and the financial outcomes of each. This is a much easier conversation than telling him he needs to do it because your gut tells you it’s the right thing for the business. The decision is placed into an objective framework which can help remove emotion from the situation.
There are dozens of decision making models out there and gut based making is one of them. It’s great for flight or fight decisions, such as how fast to run when you are approached by a bear. But in business we need to adopt a more considered approach.
FACT BASED DECISION FRAMEWORK:
1. Define decision
2. Determine decision criteria
3. Brainstorm alternatives and test outcomes (costs, benefits and risks)
5. Select the best alternative based on the evidence
6. Communicate and implement