We hear how important trusting your gut is – all the time in self-help books and speeches, but it can be difficult to know when to trust your gut feeling. Especially in running a business. And especially now, when all the usual business patterns are gone.
There is no magic combination of using data and intuition that will lead to 100% foolproof decisions. But according to new research, there is a scientific reason why it is vital to do so. How reliable is your intuition, and how much do you really have to follow that gut feeling? After all, isn’t your gut why you got into business in the first place? You “just knew” you had to do it?
Business leaders who follow their gut instinct are often portrayed as visionaries who saw what no one else could, but our desire to believe in the wisdom of intuition blinds us. Perhaps we believe that our gut feeling is absolutely trustworthy because it has led us on many fruitful paths throughout our careers. Or perhaps we have our own gut feeling when we make decisions, and we are blinded by the desire to believe in both wisdom and intuition. But you may think that data analysis is the only way to make important business decisions in today’s data world – heavy business models.
We are so obsessed with making the right choice that we are overwhelmed with thoughts and options and then disconnect from our gut feeling. We often look for reasons why we were right and the data was wrong, not why it was right. If our instincts tell us one thing, we just keep looking for data that supports our intuition. The idea of gut feeling is so deeply embedded in our minds that we can simply ignore data and act with our courage instead.
When it comes to making decisions, traders have many different tools at their disposal, which I can recommend to you. These tools have been honed over the years through tests on different experiences and revolve around logical, rational decision-making and decision-making. What if you learn to trust your gut feeling through a combination of experience and facts, using that to hone your future decision-making capability?. If you routinely practice validating your gut feel with real data, you will be more confident in the choices you make and the future of your business. This will also help with conversations with accountants and bookkeepers who will be more data-based conversations.
Good data analysis is not in competition to your instincts, but merely a way to get more information and develop a better understanding of what to do next. It’s a valuable and complementary skill.
Intuition can play a vital role in business, and if you follow it, you can avoid bad business decisions that can ultimately affect your business. It’s a powerful tool for taking calculated risks. If you use your gut to make low-stake decisions, you can better connect to your intuition, even if you lose touch with it and never consciously tap it. Trusting your intuition can help you not only in decisions like not to agree to a risky deal, but alert your internal alarm that something is wrong.
But swinging the pendulum and shifting to metrics and data only for your decisions is not necessarily the golden ticket to success. Relying too much on data can be just as dangerous as relying solely on your gut feeling, especially if you have years of experience. What is the data NOT showing? If we focus on trusting our gut AND our data, we can start to think about how we can use them together, because that might be the magic formula after all.
When you are faced with a big decision, you have to make a careful list of the pros and cons and go with your gut feeling, but sometimes it can misdirect you. By this, I mean that gut feelings play a big role in the decision-making process and can lead to some of the most important decisions in your life, such as your career path. If you only make decisions because it feels forced or difficult, then something has hijacked your courage and urge and you are forever trapped in the paralysis of analysis.
Moreover, this may not be obvious if business decisions are based on intuition or deeper and better experiences. Leaders who prefer to trust their own instincts rather than make decisions based on data may feel uncomfortable and counterintuitive when the findings are provided by algorithms, not humans.
Critics of relying on intuition and gut instinct point out that we all have a deep-seated need to see patterns. Intuition and “gut feeling” are also the result of a lot of processing that takes place in the brain, and the mere articulation of these factors can make decisions less reliable. In fact, decisions are often made before people even start to analyze them.
So, unlock your business data and use it. Understand the patterns and the stories it’s telling. Listen to your intuition and augment it with the data. Especially now that the world has changed and intuition needs all the help it can get…
Author: Brendan Roberts, CEO, Aider