The unconscious, or gut instinct, can do just as well as a conscious, deliberate decision in the business environment.
Instinctive, gut decisions may be just as good as those based on data, a study suggests.
Managers who rely on gut instinct to make decisions about new projects are just as likely to be right as those relying on the data, the research found.
However, relying on gut instinct is much faster, as data analysis typically takes a long time.
Think or blink?
Malcolm Gladwell wrote a well-known book called ‘Blink‘ about the power of the unconscious to make complex decisions in the blink of an eye.
However, since then studies have failed to back up the idea that the unconscious can outperform the conscious mind.
Still, there is evidence that the unconscious, or gut instinct, can do just as well as a conscious, deliberate decision.
And as this study underlines, sometimes gut decisions have other benefits, such as speed and requiring fewer resources.
The study comes at a time when 92 percent of companies are investing in data initiatives, which might prove unnecessary.
About the study
For the research, 122 managers in digital, advertising, publishing and software companies were asked about how they decided to allocate resources to new projects.
Among the ways they reported making decisions were:
- Majority: making the choice that most people wanted.
- Experience: going with the option that the most experienced individual preferred.
- Tallying: choosing the option with the most positive points.
The results showed that managers often relied on a ‘tallying’ approach more than other methods.
More analysis did not provide much of a boost to accuracy in decision-making and took considerably longer, the results showed.
Using instinct and rules of thumb, like tallying positive points, was just as accurate as more data analysis.
Dr Oguz A. Acar, study co-author, said:
“This research shows that data-driven decision-making is not the panacea in all situations and may not result in increased accuracy when facing uncertainty.
Under extreme uncertainty, managers, particularly those with more experience, should trust the expertise and instincts that have propelled them to such a position.
The nous developed over years as a leader can be a more effective than an analytical tool which, in situations of extreme uncertainty, could act as a hindrance rather than a driver of success.”
The study was published in the journal Psychology & Marketing (West et al., 2021).
