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Decision Making in Business

Posted on 28 March, 2013

When it comes to making critical decisions for your business, do you go with your intuition? Studies show that people do seem to have a kind of sixth sense when it comes to making snap decisions. In fact, frequently, the first decision you make, even under duress, can lead to positive outcomes.

A study at Tel Aviv University’s School of Psychological Sciences determined that when asked to choose between two options based on instinct alone, volunteers made the right call up to 90 percent of the time. The study is incredibly accurate considering that humans seemingly make poor decisions so much of the time.

This study does not imply that every time we get an inkling of fear or doubt that we are about to make a huge mistake. Rather, data is the most powerful tool for business success. But, in certain situations, entrepreneurs, and business owners would be wise to go with their gut.

When we have time to think through a decision, humans are surprisingly good at integrating value or weighing the pros and cons of a situation and acting accordingly. While this is an exciting and convenient skill to have, it’s important to keep in mind that intuition is prone to individual biases (like cognitive dissonance or the recency effect) that can lead us astray in the process.

To use your intuition for success in the business world, you need to balance that gut instinct with statistical reasoning. Analyze relevant data to support or refute your opinion and keep a clear mind under pressure. Ultimately, the best business leaders succeed on a combination of careful planning and intuitively following their instincts.

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