Planning, Startups, Stories


Tim Berry on business planning, starting and growing your business, and having a life in the meantime.

When Your Gut Screws Up Your Analysis, Shut Up and Listen 4

True story: my wife and I wanted to move but we weren’t sure where. In true MBA fashion, I set up a spreadsheet to compare candidate locations for a series of factor including outdoor sports, weather, smog, traffic, lifestyle, public education, crime, and so on.

So for each of about 12 possible places I input scores from 1 to 10 for each of the factors I’d identified. And when I didn’t like the original conclusion, I (without realizing it as I did it) changed the input factors until it did. We wanted to live in Eugene, Oregon.

I didn’t realize it then but I do now. I set up an objective analysis and then subconsciously messed with the inputs to generate the conclusion I wanted.

Do you ever do that?

Another true story: One of my daughters struggled with a job decision for weeks. She had a job, and she had a new job offer, and she liked them both. The choice was driving her crazy.

Finally, late one night, she called me up to share a spreadsheet analysis she’d done. As she went through the analysis and the input factors, I realized she was subconsciously cheating the scores towards one of the alternatives and away from the other.

I told her then that I thought she had just discovered what she should do. Her gut had chosen. The evidence was in the way she skewed and biased her objective analytics.

When your gut gets your numbers wrong, and screws up your objective analysis, shut up and listen.

(image: istockphoto.com)

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  • http://brooktroutgroup.com Steve Thoeny

    Great insight Tim.

    I have found another example is when my experienced colleagues are reviewing investment opportunities, they use their gut feelings regarding the executive team and their potential for success every bit as much as the spreadsheets that have been presented.

    Cheers,
    Steve

  • AviD

    Excellent.

    However, being aware of your “gut feeling”, might lead you to consciously try to exclude your gut, so as to remain with a “rational” conclusion…. but this could just as well leave you with a counter-bias.
    (I’m actually suffering from that now – I am aware of my personal bias, and so I’m trying to “even the score” so to speak, and I’ve noticed that I’ve pushed to hard in the other direction…)

    So, yes, the objective analysis should be objective – gather the facts, dont put a spin on it, be as honest as you can – but then go ahead and do whatever it is you wanted, anyway. At least this way you’ll have a realistic view of what your gut decision really means….
    And, if you’re not planning on basing your decision on the “objective facts”, it should probably be easier to keep them objective…

  • http://20minus.com Thanasis Polychronakis

    We always do what our hearts tells us.

    We do analysis, try to collect and objectify data, see and prove that what we want to do is 3rd or worse choice… and still we pick it.

    That’s a human zero-day exploit that all great salesmen have mastered

  • http://www.managementdirect.com Management Direct

    Two great stories making a valuable point. You cannot keep your gut out of anything you do, not completely. I am voting for this because I love what the stories tell, i love that your head spotted what was going on. Also we are so often advising that the emotion of business decisions must be tested against hard headed thinking that it is important to redress the balance. Which ever part of you of you is talking: Shut up and listen! Loved the post. Brian