Does gut instinct have valid grounds in decision making?

It was after a long weekend, the kind where one has Monday off as a national public holiday. I opened my inbox on Tuesday morning, and at 9:04am I read an email from a friend with an interesting article as the subject line.

The article was about outcome bias. You can read the article here if you’re interested. It’s a 10 minute read so I’ll give you the wrap up – It essentially explores, and I quote from the article,

…your tendency to judge a decision by its eventual outcome instead of judging it based on the quality of the decision at the time it was made.

Abhishek Chakraborty

This here follow up article unwraps a point that was made to which I have some objections. Reading the article the following point made by Chakraborty is one I want to explore further, which is based on the following, which again, I quote;

[Confirmation Bias]… You see this a lot with poor managers. A manager who makes a decision based on his “gut instinct” — one who goes in the opposite direction because his gut says so when his team is strongly advising him in one direction — is going to consider his gut feeling to be reliable if he gets a positive outcome from it. These managers suffer from Confirmation Bias — their false belief on their gut is confirmed (thus boosting their overconfidence) when the outcome is luckily in their gut’s favour… These managers are pretty much like the drunk drivers.

Abhishek Chakraborty

The article at large raised some great points, however, I’d like to highlight a key word here to which, in the first instance, I have a problem with; “luckily”.

I’m a scientist, so for one, I don’t believe in luck. This, for me, took some of the validity out of Chakraborty’s argument. Secondly, in the example provided by Chakraborty, if the manager in question based their decision on gut, in spite of the teams advice, and the outcome was the right one, it would suggest, even in the smallest of amounts, that “gut instinct”, by default, is valid.

Let’s break down decision making for just a second. Decisions can be made in a number of ways;

  1. Scientific / quantitative reasoning
  2. Ego / selfish driven decisions
  3. Decisions based on gut instinct

Scientific / quantitative based decisions

These decisions are based, as the title suggests, on data, usually quantitative, and to a lesser extent, qualitatively. To have any statistical significance one would argue the need for at least a set of 20-25 data points. Furthermore, a trend towards any outcome, in any direction, is statistically not identifiable before at least 7 such consecutive data points. For most people making decisions in day-to-day life or in a place of work, this volume of data is usually not feasible to wait for, nor is it usually available. Thus, a reduced version of this based on historical correlation would suggest that “if it happened a few times before, and you’re seeing similar indicators, it’s likely to happen again”. This type of language enters the realm of risk based thinking. And for the most part, for what most people need, it’s suffices most of the time.

In any event, a decision made on scientific grounds is, and should be, based on a risk managed approach. This, by default, removes the person from the decision making process, and places the outcome on a process of risk evaluation. In such a case one would identify the likely risk factors or failure modes and consider what controls are currently in place to indicate it’s level of risk. From there, a team of subject matter experts would consider mitigation that could reduce the element of risk through one of three ways;

  1. Reducing the likelihood of the event occurring
  2. Reducing the impact the event would have on the stakeholders involved
  3. Increase ones ability to detect such an event before it impacts said stakeholders

Decision based on ego or selfish gain

These decisions are made for the soul benefit of the individual. It completely lacks consideration for the you, me, us approach where a win-win-win outcome could have otherwise be sought.

Such decisions seldom benefit anyone else but the decision maker. Long term, such decisions erode trust, culture, and consumer confidence (in the case of business). Regardless of the outcome, usually there is more damage done to reputation, culture and the bottom line than any positive outcome.

Decisions based on gut instinct

Here’s the real kicker – even in the event that a risk based quantitative approach has been taken, or, in an instance where time did not permit such a process to occur, there are circumstances where decisions need to be made fast. This is of particular concern when there is an inherent lack of data available to make such a decision. Such decisions must therefore be based on experience and time in the field.

When, in the case of the example by Chakraborty, where the manager [went] in the opposite direction because his gut [said] so produced a favourable outcome, in spite of his team advising him otherwise, is there really value in judging the quality of his decision when the outcome was infact favourable? If the manager does the same thing in a week, utilises their gut and once again gets a favourable outcome, what’s to say that their inherent experience isn’t the catalyst behind such good outcomes?

For decades, the intelligence quotient (IQ) has been an acceptable indicator of one’s level of intelligence, albeit probably not serving as much value as I’d like to believe but none-the-less society at large generally accepted it’s value. In the last few years there has been an increasing focus on emotional intelligence (EQ) which, for my mind, is significantly more valuable than it’s cousin, IQ. EQ, in my experience, is not learned as so much as it is developed, intuitively and subconsciously, through experience.

You may have seen the know what you don’t know model? It essentially runs in a circle or quadrant, categoried by four levels of “knowing”;

  • You don’t know what you don’t know
  • You know what you don’t know
  • You know what you know
  • You don’t know what you know

It’s at stage four that one becomes intuitive in their ability to execute on a task or the making of a decision. At this point it’s as though your experience has engrained within your nervous system, just like walking, the ability to talk, the ability to write, run, drive a car etc. They are all so well learned that one doesn’t even think about the action. Through enough experience in the field, an individual, or manager, as in the previous example, is more than likely able, and competent, to make a decision with a good outcome in most senarios, most of the time if called upon. And in the absence of data, time or other subject matter experts for consultation, they may need to make such decisions. Further, leaders of a team with lesser experience may very well inherently just make better decisions in some instances.

Let’s look at an example, the case of Captain “Sully” who emergency landed a plane on the Hudson River. There was likely, through a significant level of experience, a factor of “you don’t know what you know” at play which lead to his successful saving of the plane, i.e., instinct. Most people “on the outside” would have argued not to land the plane there, but he did and saved lives. This is evident in the argument Sully makes when simulations showed the plane could have infact made it to a different airport. Sully claimed that the outcomes were likely due to the fact that the pilots running the simulation knew the outcome of which they actually had to achieve, so the decision making process was completely different. It’s through experience that gut instinct gave Sully the ability to save the people he did, in a short period, with little data and support. It also serves to argue that outcomes, or atleast knowing them, affect the actions and decisions proceeding it. Not unexpected.

Another such example is the officer on active duty, trained so well and to such an extent that much of their operational execution becomes instinctual. They have learned the necessary requirements to be able to make decisions without thinking about every move because often such a luxury in time isn’t available. I would argue there are many such examples where individuals narrowly dogged severe danger because they chose to follow their gut.

In the end, are we loosing focus of what matters?

Far too often, retrospectively, we spend too much time reviewing the outcome, or even the decision making process that lead to it. In day-to-day situations this can lead to blame, poor progress and/or poor productivity and painfully, regret. And for what purpose?

Regret is poison, it’s crippling and adds no value to progress. I’d argue that each decision making process, in its own right, plays a part in producing an outcome. And the outcome certainly matters when making decisions in the future. That’s the foundation of experience, and human growth.

Either way, in any situation, one cannot change the outcome, and ultimately you don’t know exactly what different outcome could have eventuated had you of taken a different approach. So onwards and upwards to progress.

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