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Decoding Intuition for More Effective Decision-Making

12 september 2011

It turns out that intuition is not really intuition at all. Just like the invisible, inseparable quarks that underlie the protons and neutrons in the nucleus, rules of thumb (ROTs) are the fundamental, sometimes invisible, particles of CEO decision-making. They are the building blocks that underlie what CEOs describe as 'intuition' or 'gut feel'.

Ask an experienced CEO how she/he made a major decision and their typical response is intuition or gut feel. Yes, analysis also plays a role, but intuition was found to be a major or determining factor in 85% of thirty-six major CEO decisions that we studied. Some were good decisions, some were not, but regardless, intuition seemed to always rule the roost. But what is it?

After persistent and deft questioning, CEO's will identify, sometimes to their surprise, judgmental heuristics — ROTs — that go a long way towards explaining their major decisions. It is these building blocks that we must examine in order to discriminate between 'good' and 'bad' intuition.

After CEOs identify a few ROTs, a torrent of supplementary ones often follows. Some CEOs argued, however, that they use values for guidance, not ROTs. But values alone don't provide clear guidelines. Only when they are operationalized into ROTs do they serve as decision-making tools.

Lees verder in Modesto A. Maidique's blog.
Modesto A. Maidique is Visiting Professor at the Harvard Business School. He is President Emeritus and Executive Director of the Center for Leadership at Florida International University in Miami. His current research is in the areas of decision-making, leadership, and executive development.