Testing your GUT instinct

9 Nov

In his last blog post, https://sopinion8ed.wordpress.com/2012/10/31/the-role-of-gut-instinct-in-is-evaluation-at-the-proposal-stage-4/ Lucid21 successfully analyzed the role of gut instinct as an informal method of evaluating investments in IT. Realistically no IT investment will be made without hard facts and figures relating to the return on investment, gut instinct should be taken into account, as rationality teamed with instinct can successfully evaluate an investment. There seems to be a general consensus that gut can play a role if taking into consideration alongside hard financial evidence.

Campbell and Whitehead, (2010) state that, “Our gut intuition accesses our accumulated experiences in a synthesized way, so that we can form judgements and take action without any logical, conscious consideration.” Lisa Quast, contributor for Forbes Woman poses the interesting question, “how can we be sure our gut isn’t giving us the wrong information?”

In a 2011 article Quast presents the work of Campbell and Whitehead, (2010) who have put forward four simple tests to perform in order to determine whether or not your gut is making the right decision.

The familiarity test

Thinking back to similar situations, searching for, “appropriate memories.” This test is about determining key uncertainties in a situation, and determining whether or not you can make sufficient judgement about them.

The feedback test

Analyzing the feedback you have received in the past. Were your past decisions praised and supported by your colleagues? If they weren’t the right decisions what kind of feedback did you receive from your colleagues.

The measured emotions test

This test is about separating past experiences from past traumatic experiences. If past experiences were traumatic it can make us wary of similar situation. This presents a bias to the decision-making process. Therefore to avoid this bias, the authors stress that it is important to involve others to, “solicit their opinions of the situation.”

The independence test

This test is to ensure you are not influenced by personal interest or attachment.

What do you think? Should decision-makers test their gut before making judgements on investments?

Link to Forbes article: http://www.forbes.com/sites/lisaquast/2011/08/29/should-you-trust-your-gut-testing-your-decision-making-instincts/

Link to Campbell and Whitehead article: http://www.mckinseyquarterly.com/How_to_test_your_decision-making_instincts_2598


2 Responses to “Testing your GUT instinct”

  1. mirra2 November 10, 2012 at 4:32 pm #

    Great article ronnco90, “in my opinion I believe that decision makers should test their gut before making judgments on investments to avoid the risks” One of the most important thing is that they should trust their “gut instincts” as McKinsey Quarterly published in (March 2010).

    According to James Reason (1990) for effective decision making, a person must be able to forecast the outcome of each option as well, and based on all items, determine which option is the best for the particular situation.

    From a normative perspective, the analysis of individual decisions is concerned with the logic of decision making and rationality and the invariant choice it leads Daniel Kahneman, Amos Tversky (2000).

    As I mentioned in my blog in order to influence and improve IT investment decisions, it would be very useful to have a deeper understanding of this interior practice or functioning of the managerial mind.

    • lucid21 November 11, 2012 at 3:30 pm #

      Hi ronnoc90- very good post! To be honest I never knew there was an official test on a gut instinct but that’s very interesting. I definitely would recommend it during a decision making process at the managerial level. It is a very good way in the attempt to mitigate oneself being bias when deciding to invest or not. It could highlight subconscious externalities that affect decisions which essentially could be crucial to a business. I’m sure down through the years many CIO’s have fallen victim to this type of irrational decision making. I suppose “Testing you GUT instinct” can relate to the phrase “always look before you leap” really.

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