One of the main functions of a manager in an organization is to make decisions. For different reasons, decisions are often made "intuitively". What is intuition? What is an intuitive decision? And is it a good thing?
Although it can be tempting to use the term "intuition" as a synonym for voodoo, or some kind of inexplicable "feeling", intuition is simply a shorthand term for a more detailed definition, which will be derived shortly.
An intuitive decision is usually made quickly, which is a positive property in itself. But to be made quickly, it must be based on an interpretation of some partial or inaccurate reality. Whether that is positive or negative depends on the outcome.
The information from which conclusions are drawn to make the decision is not a direct manifestation of reality, but is rather an indirect recollection from the decision-maker's memory. One cannot store and analyze all available information relevant to a particular decision (not to mention multiple decisions) in their head. Therefore, the information is partial and often inaccurate. One's memory is not only partial, but is also subjective, biased and is affected strongly by emotion. Therefore, the decision-making process is driven by interpretation, which might not even be consistent.
Some decision makers, albeit a small minority, have developed the ability to make intuitive decisions that consistently lead to outcomes no worse than if the decisions had been made based on real data. Thanks to knowledge, experience and skills gained over many years, as well as talent, these individuals have taught themselves how not to "waste" their memory on the majority of available data and only remember the minimum amount required to make decisions effectively. In other words, they have optimized their own decision making process. Most importantly, they have figured out what is worth remembering, or in other words, which parameters most significantly affect a decision and its outcome.
Therefore, an intuitive decision can be highly positive and efficient, but only when the decision maker is skilled in making such a decision. To say that a person has "great intuition" or is good at making "intuitive decisions", simply means that they possess that illusive skill set.
What can we learn from this?
Premise: People who possess the skill set allowing them to make effective intuitive decisions are few and far between.
Premise: Even these people have had to hone their skills over a long learning curve.
Conclusion: It is always preferable, and especially for young managers, to adopt a data-driven decision-making methodology.
Data must be gathered consistently and in an orderly manner. Decisions, and the information that led to making them, must be recorded. Every decision should be evaluated in retrospect, based on the outcome, in order to validate the quality of the contributing information and decision-making process. When in hindsight, a different decision may have led to a superior outcome, adaptations must be made to the process accordingly. This way, over time, the minimum required information for effective decision-making can be distilled and the entire process can be optimized.
It is important to note that there is a practical limit to data collection and management, as well as to the amount of retrospective scrutiny of past decisions. As a result, there remains a certain degree of bias in all decision-making. Hence, the top objective is to optimize the resources invested in gathering, organizing and analyzing data versus the quality of the outcome. Over time, if done properly, outcome quality will increase, while the amount of resources used in the decision-making process will decrease. Quicker decisions, based on less information.
It can thus be concluded that intuitive decision-making is not only a good thing, but is, in fact, a major contributor to excellence in decision-making and in management. A good manager is one who regularly examines the outcomes of their past decisions, makes the required adaptations in their methodology, and in so doing, shortens their learning curve to become an outstandingly effective intuitive decision-maker.
A generalization:
Performance. In any context (business, athletics, academics, etc.), performance should be evaluated in light of the conditions leading thereto (and were recorded!) and compared to the best possible attainable level. The conditions (decisions, resources, organizational structure, etc.) and methods should be adjusted to promote a state in which performance is maximized or maintained at a high level.
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