You Can “Trust your Gut” on Business Decisions: Here’s Why

You Can “Trust your Gut” on Business Decisions: Here’s Why

When you are faced with a difficult decision, such as who to hire for that new position or what vendor to choose for an important contract, do you often have an intuitive – or gut — feeling? Do you go with it?

Many business studies are revealing that you should. In 2012, researchers from the Columbia Business School conducted eight studies in which they compared people who trusted their feelings in making decisions and with those who didn’t and found that the ones that “went with their gut” were right more of the time.

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Now before you head out to buy a lottery ticket or place a bet at the track, there’s more. The decisions that went well were all based on situations in which the decision-maker had some prior knowledge or experience. In other words, the study participants used their accumulated wisdom to make an informed decision.

Intuition or gut instinct is really a form of unconscious reasoning. Our brain takes stored information from our prior experience with a subject or situation, recognizes a pattern and then processes that information.

It can even do this when we sleep – sometimes even more effectively than when we are awake and consciously worrying about a decision. The good news is that the more life experience you have, the more patterns your brain will make, and the better your intuitive decision-making capability. So there really is something to the phrase “older and wiser,” after all.

Scientists call the way the brain groups of information to help us remember it and use it more effectively “chunking.” Over time, your brain adds more images and details to help you process the data. It’s the reason you can hear a piece of music and recall where and when you once heard it or the way you can see only a small piece of a familiar design and know what the rest of it looks like.

This process of intuition also helps us to size up a situation quickly, such as when you see someone walking toward you on the sidewalk who does not look right, so you cross to the other side of the street. Or when you just “know” that other car is not going to stop at the intersection, so you hit the brakes.

How do you know when to trust your gut on important business decisions? Here are a few areas to consider:

Taking a new position. A good time to trust your gut is when you have a toss-up decision. Let’s say you have two different job offer sand many of the facts of the offers—job description, salary, location – are the same. Both seem good, and you are struggling with how to choose. Use your instincts. At which interview did you feel the most comfortable? Which situation just feels right?

Making a business purchase. Endlessly studying financials can be counter-productive sometimes. Often it is effective to let your subconscious abilities work on the decision, sometimes called “sleeping on it.”  Taking a step away from the pressure of the decision can give you the perspective you need.

This subconscious decision making is the basis of psychologist Ap Dijksterhuis’ “Unconscious Thought Theory.” In one of his studies, Dijksterhuis showed that people with knowledge of soccer  made more accurate predictions about upcoming league results if they distracted themselves for several minutes before making their calls.

The been-there-done-that test. Do you have a nagging feeling you are about to make a mistake? Maybe you use the words “I just don’t feel right about it” or something similar. If you feel this way, it is probably because you have experienced a similar situation. To make an effective decision, be sure to filter out any emotional triggers that could be related to the experience.

Hiring someone or taking on a new client. What is it about first impressions? We rely on physical clues and a variety of other factors when we meet someone new. Sometimes we just have a hunch that someone will fit in with our team well.  We click. One of the most valuable ways of using your intuition is with your people skills.

Developing this skill of making and trusting your gut is a valuable tool. It can save us time and stress. In his book Blink: The Power of Thinking Without Thinking, author Malcom Gladwell writes:  “I think we are innately suspicious of this kind of rapid cognition. We live in a world that assumes that the quality of a decision is directly related to the time and effort that went into making it.

“But there are moments, particularly in times of stress when haste does not make waste, when our snap judgments and first impression can offer a much better means of making sense of the world…Decisions made very quickly can be every bit as good as decisions made cautiously and deliberately.”

So the next time you feel the urge to talk yourself out of a snap decision, give yourself the benefit of the doubt. You just may be right.






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