Business decisions cannot always rely on gut instinct

Tuesday 4 December 2012

Older workers

Business leaders need to appreciate that their gut instinct may not always lead them to take the best course of action, it has been claimed.

Writing for the Economic Times, Arun Pereira explained that some decisions need to be made based upon the hard facts, rather than a sense, feeling or personal view.

He explained that, while professionals are working their way up the corporate ladder, many rely on their instincts - and enjoy a great deal of success.

But Mr Pereira said it is much more difficult to make educated guesses when you move into senior roles, and the work becomes less repetitive and predictable.

"Regardless of how effective an executive's gut instinct may have been in the past, it is unlikely that such a skill will carry over to any new decision environment," he claimed.

"In other words, effective gut instinct does not scale easily outside tightly-defined decision contexts."

But Mr Pereira said that few senior executives recognise this - which can lead to erroneous judgements.

"Managers must understand that gut instinct can be cultivated; however, they must also recognise that such ability is effective only in tightly-defined decision contexts," he stated.

Posted by Dan Smith