Is your gut feeling a good guide to making business decisions?
Like so many things, one answer is…
According to Kahneman there’s a big difference between:
- The situation where the experiences driving your intuition are fairly common, and
- One where those experiences are memorable but infrequent.
Also, consider whether the feedback from your decision is quick, or far down the road.
Hiring people is one area where it’s often been suggested that a decision be tested by asking yourself, “Does this feel right?” The same test could be applied to deciding whether or not to do a relatively simple business deal.
Kahneman suggests that personal relationships, such as marriages, can offer situations where you should almost surely go mostly with your gut.
Major decisions, like going into partnership with someone or another company, should probably be made with hard information. Even then, doing a deal where the numbers add up, but it doesn’t “seem right”, could have disastrous results.
It’s happened to me!
That could be for no more reason than, “You get what you think about”, to paraphrase Earl Nightingale.
Or, maybe that the faint voice nagging in the background was driven by something important that you, or I, didn’t consciously recognize.
Seems the bottom line is…
Pay attention to those nagging feelings, and be careful!