Entrepreneurs and leaders need to believe in themselves but nobody should believe they’re always right.  

We can enjoy the simplified narrative of the visionary leader (who doesn’t love a superhero story?) but we‘d learn more from the nuanced tale of how they built a decision-making powerhouse.  

Your Intuition is BAD.

I don’t mean it personally, it’s probably much better than mine.  But it’s not as good as you think it is.

Daniel Kahneman’s intuition is presumably OK (he did win a Nobel Prize) and he tells us intuition’s only reliable in “an environment of sufficiently high validity and [with] adequate opportunity to practice”.

‘High validity’ means a world governed by laws where given inputs lead inexorably to consistent results; and ‘opportunity to practice’ means you gets lots of tries at the same thing to see how it turns out.  Does that sound like your life?  (It doesn’t sound a lot like mine.)

Even experience and expertise aren’t much help.  Tetlock demonstrates that.   

In a complex and uncertain world, in which we’re innovating, intuition’s no better than flipping a coin. 

So how do we make great decisions?

We need to stop valuing ourselves as decision-makers and see ourselves as decision-architects. We need to build great systems to make great decisions. 

If data’s easily available, collect it and share it. If data isn’t easily available, think harder, there’s usually something. But make sure your analysis is sound (keep yourself honest by sharing the data, not just your conclusion) and NEVER just cherry pick it to confirm your intuition tempting though it is. (See Watch What You’re Watching, a lot of that’s transferable to this.)

Of course data doesn’t make decisions, it just creates a foundation for a common understanding. We still need to make a call, someone needs to take that step into the darkness. 

But if we can’t trust our intuition?  How do we get out of the bind?  Well, fortunately, we all net out. 

We’re each a fabulous mess of biases (all of which is fascinating but we’ll save that for a separate post).  Fortunately, we’re all a mess of different biases and pulling in divergent directions, particularly if we pick our team to make sure they do.

Find an optimist, a pessimist, a contrarian, someone with an instinct for how people act and another with an eye for unintended consequences. (Now, that’s a sit com!)

Bringing the right people in and being genuinely open to their thoughts will iron out everybody’s individual biases.

Now just run the meeting right and assuming we’re all informed, engaged and intelligent, the rest will take care of itself. 

Yes, you may still need to make a call, but basing it on this, not on intuition, gives you what you need to make the right one.

Let’s talk about how we can build your business into a decision-making powerhouse.