Intuitive Decision Making
Despite the welter of data and analytics at their disposal, experienced managers often need to rely on gut instinct to make complex decisions under duress.
The idea that executives should make decisions according to what their intuition or “gut” tells them is generally out of favor. In a scientific age, one’s feelings are supposed to be mastered, while painstakingly collected megabytes of data reveal the correct path. And yet people continue to feel — intuitively, if you will — that this is an oversimplification. For many complex decisions, all the data in the world can’t trump the lifetime’s worth of experience that informs one’s gut feeling, instinct or intuition.
Consider three brief examples. In the game of chess, it appears that grandmasters are carefully thinking through every possible move and countermove. But, as former World Chess Champion Garry Kasparov explained in an interview, “The total number of possible different moves in a single game of chess is more than the number of seconds that have elapsed since the big bang created the universe.” For Kasparov, who claims to be able to think up to 15 moves in advance, “intuition is the defining quality of a great chess player.”
Of course, business is not a game, and much more is at stake when an executive makes a decision that will affect an entire company. Science, with its often practical outcome — a new drug or technology — is closer to business than chess. And while Thomas Edison famously attributed the quality of genius to “99 percent perspiration,” that remaining one percent is often sublime. Further, scientists themselves often address the importance of intuition to their work. Consider the comments of Anton Zeilinger, professor of experimental physics at the University of Vienna and the leader of research groups that have made breakthrough discoveries in quantum teleportation and quantum cryptography: “I believe the most important thing is that you should … above all [trust] your own feeling and your own intuition, and then act accordingly.” When faced with more than one path of research, he always chooses the more radical one: “Intuition guides me, gives me a feeling about which direction I should continue in.”
A professor on the cutting edge of experimentation, however, might be expected to take this stance. Wouldn’t a similar approach be foolish, or at least very risky, in business? Not necessarily. Take the evolution of KTM Sportmotorcycle AG, a large manufacturer of motorcycles with headquarters in Mattighofen, Austria. In 1992, Stefan Pierer became CEO of the company as it emerged from bankruptcy.