Making Decisions Using Intuition
Intuition can be seen as a type of knowledge that is based on our experience and is usually filtered through emotional channels. There are times when we unconsciously process new information by comparing it to experiences we’ve had in the past, leading to predictions about the future that are commonly referred to as “gut feelings.” It is interesting to note that such reactions are generally connected to actual fact-based data. One decided advantage in using intuition to make decisions is that it allows us to contact inner capabilities in order to put together information quickly, and often with an impressive degree of efficiency. This comes in handy when managers are called upon to make strategic decisions in situations that are time-sensitive.
One of the pitfalls attached to using this approach is the problem of justifying the results. There have been instances where a manager has made a decision that was primarily based on intuitive processes, and then felt that it had to later be backed up with facts and figures in order to defend it. It is something of a bias in our society to not trust our feelings. Confident managers learn to overcome this prejudice by placing an appropriate level of credence on their intuitive promptings. As author and international speaker, Bonnie Marcus has explained, “Part of the credibility gap, I believe, can be bridged when we understand the neuroscience behind intuition. It’s not woo-woo; it is a practical leadership tool. This is a skilled, self-aware decision-making approach, not a willy-nilly use of the next whim that pops into your head.” (Forbes.com). And the fact remains that a great number of effective leaders in every field attribute their successes to their talent in this area.
Making Decisions Using Market Research
Market research is based on agreed-upon knowledge of a theoretical nature, which often depends on mathematical components. The primary objective of such research is to come up with principles that can be used to determine marketing strategies based on the actions and proclivities of consumers. Although they sometimes rely on abstract theories, managerial researchers tend to pride themselves on acting according to fact-based principles. It is a type of research that gains credence through its connection to scientific methodology, by studying aspects of specific situations in order to derive solutions that have the greatest probability of success. For example, market research is employed to explore the viability of new products long before a company decides to actually launch them.
The process of managerial research can involve elaborate levels of computation and evaluation. It enables a company to achieve and maintain its competitive edge by providing in-depth data which can be directly applied to any number of marketing decisions. It is especially effective in determining how to best address consumer needs, addressing them in ways that increase a company’s profits, while enhancing the positive attitudes of consumers toward its products. A decided advantage in market research is that managers can use the collected data to justify their decisions concerning practices and policies. But this method can lead to difficulties, as well, such as a dependence on limited or even inaccurate data. According to market researcher, Michaela Mora, “Reliance on…the use of ill-designed research can result in misguided decisions…by feeding bad information to the source that nurtures it.” (RelevantInsights.com)
Which Approach Is Best?
Intuition and market research each have a place in the process of managerial decision-making. Although data compilation and evaluation are crucial aspects when it comes to running companies, it is also important to acknowledge that companies are not merely concerned with data alone. In the words of management professor, Laura Huang, “When making an important decision, should you trust your gut, or gather more information before deciding? There are two factors to consider. The first is whether more data could actually help you pick the right option… The second factor is the context of the problem you’re facing… And remember: Intuition draws on the objective and subjective information you already know—so you’re gut feel is, to some extent, data-driven.” (HBR.org).
(Graph is courtesy of marketingcharts.com)
A global survey was conducted by the MIT Sloan Management Review asking high-level executives, half of whom being marketing execs, whether they believed their organizations make decisions based on intuition or data obtained through market research. Overall intuition received slightly higher numbers with 38%, with data from market research yielding 27% and a combination of both being 35%.
According to these statistics, it can be argued that the optimal method of managerial decision-making would be intuition alone, however, a combination of intuition and market research should be utilized in most managerial situations. Although skillful managers often rely on their intuition, it can’t hurt to also consider the relevant data. In addition, the information that is collected through marketing research can enable managers to determine if their intuition-based decisions have been accurate. Intuition, combined with fact-based collected data, often contributes to the most effective outcomes. Marketing decisions do not have to be limited to one approach or the other. Having the flexibility to embrace both aspects will ultimately prove to be the best strategy. As the following Dilbert comic reveals, just because it makes sense doesn’t mean it’s the best decision one can make.
(Comic strip courtesy of Dilbert)
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Otis Kopp
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