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HUL 204 - Decision making - Intuitive Decision Making

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					  DECISION MAKING
INTUITIVE STRATEGIES




              Snehlata Jaswal


 HUL 204 Leadership, Decision making, and Communication in Organizations
        APPROACHES TO DECISION MAKING
There are two broad approaches to a decision making model
Intuitive Decision Making       Rational Decision Making
Rational decision making can be quite time consuming and often
requires a lot of preparation in terms of information gathering.

Rational models are designed to firstly identify the frame of the
decision. Based on the information available, alternatives are
generated. Further information is then gathered about these
alternatives in order to choose the best one.

But what happens when there's too much information? How do you
separate the useful from the worthless?

The world is changing so rapidly that waiting for things to stabilize
may cause a delay in decision making and lead to missed
opportunities. Many think the way forward involves re-harnessing the
power of our intuition.
INTUITIVE DECISION MAKING IN OUR LIVES
The idea that executives should make decisions according to what
their intuition or “gut” tells them is generally out of favor. In a scientific
age, one‟s feelings are supposed to be mastered, while painstakingly
collected megabytes of data reveal the correct path.

And yet people continue to feel that this is an oversimplification. For
many complex decisions, all the data in the world can‟t trump a
lifetime‟s worth of experience that informs one‟s gut feeling or intuition.

Consider the game of chess, it appears that grandmasters are carefully
thinking through every possible move and countermove. But, as former
World Chess Champion Garry Kasparov explained in an interview,
“The total number of possible different moves in a single game of
chess is more than the number of seconds that have elapsed since the
big bang created the universe.” For Kasparov, who claims to be able to
think up to 15 moves in advance, “intuition is the defining quality of a
great chess player.”
                   HUL 204 Leadership, Decision making, and Communication in Organizations
  INTUITIVE DECISION MAKING IN THE ARMY
In military schools historically, the rational, analytical models
have been utilized. It is also long been recognized, however, that
once the enemy is engaged, i.e., you are at war, the analytical
model may do more harm than good. History is full of examples
where battles have more often been lost by a leader‟s failure to
make a decision than by his making a poor one.

"A good plan, executed now, is better than a perfect plan
next week.“ - General George S. Patton, Jr.

So, the military often educate soldiers of every rank to make
intuitive decisions. Information overload, lack of time, and chaotic
conditions are poor conditions for rational models. Instead of
improving their rational decision making, such conditions require
intuitive decision models. Why? Because they work!
   DISADVANTAGES: INTUITIVE DECISION MAKING
To make a decision intuitively the person or group just has to go with
  the option that satisfies their emotional reactions to the alternatives.

The advantages of this type of model is that it is quick and it helps
  ensure that it takes into account what you really care about.
  Because you have positive feelings about the decision you will be
  well motivated to carry it out.

But intuitive decisions can have some serious drawbacks:
• You might not have fully considered all the alternatives and
  therefore have missed an even better solution.
• You might also have based the decision on inaccurate or
  incomplete information.
• Your prejudices might make you overrule the facts.
• You might not hire the best qualified person because of say
  prejudice in terms of age, sex, or race.
• Intuitive decisions might be very difficult in a team decision situation
  because people have different intuitive perspectives.
            INTUITIVE DECISION MAKING
Some people believe intuitive decision making to be based on
unlikely coincidences, lucky guesses, or some kind of new-age
hocus-pocus. Many universities are still only teaching rational
decision making models and suggest that if these are not used,
failure results.

However, some researchers are studying intuitive
decision making models. These groups are realizing that
intuitive decision making is not simply the opposite of rational
decision making, and intuition can positively contribute to
success at individual or organizational levels.
INTUITIVE DECISION MAKING IN ORGANIZATIONS
Burke and Miller (1999) interviewed 60 experienced
professionals holding significant positions in major
organizations across various industries in the U.S.

The executives provided rich descriptive insights about
intuitive decision making. They discussed the nature of
intuition and how it is developed, how often they use intuition
and how they are prompted to do so, and the types of
workplace situations in which intuition is used.

The interviews were used to develop a descriptive profile of
those using intuition in the workplace and to document the
perceived quality and benefits of intuitive decisions.

               HUL 204 Leadership, Decision making, and Communication in Organizations
                  BURKE AND MILLER (1999)
What is intuition? What are intuitive decisions based on?
• Experienced-based decisions. Fifty-six percent of the interviewees said intuitive
  decisions were based on experience. Accumulated successes and failures, in
  work and in personal life, formed a set of experiences on which they drew in
  particular situations. This concept of intuition suggests that intuition resembles
  a mental map or schema generated from years of practice.
• Affect-initiated decisions. Forty percent of the subjects said intuition is based
  on a person's feelings or emotions when presented with information in a
  decision-making scenario. This characterization is consistent with the lay
  interpretation of intuition as a gut feeling, and has been supported by research
  that suggests emotion is a central element in decision making.
• Cognitive-based decisions. Some participants also characterized intuition as
  based on knowledge and skills learned through training seminars and
  textbooks. The methods for strengthening intuitive skills were workshops,
  courses, and books.
• Subconscious mental processing. Some described intuitive decisions as a
  subconscious mental processing that automatically happens in the background.
• Value-based decisions. A few respondents referred to their intuitive decision
  making as attempts to make a correct, acceptable, or ethical decision. They
  suggested that intuition involves some element of personal introspection by
  decision makers to generate a decision that is compatible either with their own
  moral codes or with their companies' cultures.
            BURKE AND MILLER (1999)
No one in the group of professionals viewed intuition as a
paranormal power or a personality trait, which helps us to
understand at least what intuition is not.

Nevertheless, more than half represented intuition as
distilled experience and an affective response.

Thus, intuition may be thought of as a cognitive conclusion
based on a decision maker's previous experiences and
emotional inputs.




              HUL 204 Leadership, Decision making, and Communication in Organizations
                    WHO USES INTUITION?
Employees who have more experience, who are older, or who
hold managerial positions tend to use their intuition more.

Managers who effectively employ intuition in the workplace are
confident and comfortable, open-minded and flexible,
experienced, willing to take risks, fair and unbiased, reflective and
insightful, knowledgeable, and creative.

Upper-level executives need to apply intuition more than others
because of their need to see the bigger picture, to address
conceptual rather than technical matters, and to deal with long-
term rather than short-term time horizons.

Nearly 80% of the interviewees did not cite gender as an
important factor in intuition. This maybe because women in male-
dominated workplaces may wish to appear analytical rather than
emotional in their decision making, or they may tend to employ
                  HUL at work than in and Communication in Organizations
their intuition less 204 Leadership, Decision making,non-professional situations.
           FREQUENCY OF USE
Asked whether they always, often, sometimes,
seldom, or rarely, used intuition in the workplace, 47
percent of the sample answered often, 30 percent
sometimes, 12 percent always, seven percent
seldom, and three percent rarely.

Almost all respondents (91.5 percent) said that they
had combined intuition with data analysis in their
history of workplace decision making, employing
intuition in concert with deductive processes.




            HUL 204 Leadership, Decision making, and Communication in Organizations
  ADVANTAGES: INTUITIVE DECISION MAKING
Expedites decisions. Many participants felt that by reducing the
amount of data required, they experienced a faster decision
process, as measured by time.

Improves ultimate decision. Some participants reported benefits
associated with intuition as a result of improved decision-
making outcomes. Examples included a fairer outcome, a higher
quality product, and enhanced customer satisfaction.

Facilitates personal development. A few respondents saw
intuition as having certain personal benefits - a skill which
helped them develop a full set of professional skills or provided
them with a certain element of power.

Promotes decisions compatible with company culture. Other
study participants claimed intuition helped them make
decisions that were consistent with their company's culture and
values.         HUL 204 Leadership, Decision making, and Communication in Organizations
 HOW TO IMPROVE INTUITIVE DECISION MAKING
Executives should:
• be more attentive to the overall decision pro-cess;
• challenge decisions when they feel or sense the need to do
  so;
• reflect on past decisions and the role that intuition played
  and attempt to learn from any mistakes;
• practice applying intuition in work situations or with
  hypothetical scenarios, cases, or exercises;
• watch and observe when and how others employ their
  intuition;
• become educated about intuitive decision making by
  reading books and articles, and attending conferences;
• learn to take risks when making decisions with-out being
  afraid of the consequences;
• practice making decisions without all the data necessary.
              HUL 204 Leadership, Decision making, and Communication in Organizations
WHEN TO USE INTUITIVE DECISION MAKING
• when decisions need to be consistent with the
  organization's culture and values;

• when time is of the essence;

• when explicit cues are lacking because policies,
  rules, guidelines, or expert guidance are absent;

• when uncertainty prevails because of new product
  planning or strategy formulation;

• when quantitative analyses require a check and
  balance.

            HUL 204 Leadership, Decision making, and Communication in Organizations
              INTUITIVE DECISION MAKING
Klein (1999) suggests that people actually use an intuitive approach 90%
of the time. His recognition primed decision making model describes
that in any situation there are cues or hints that allow people to recognize
patterns. Your mind does not compute, it senses patterns. Obviously, the
more experience somebody has, the more patterns they will be able to
recognize.

Based on the pattern, the person chooses a particular course of action.
They mentally rehearse it and if they think it will work, they do it. If they
don't think it will work, they choose another, and mentally rehearse that.
As soon as they find one that they think will work, they do it. Again past
experience and learning plays a big part here. There is no actual
comparison of choices, but rather a cycling through choices until an
appropriate one is found.

Obviously people become better with this over time as they have more
experiences and learn more patterns.

Big question: Can this also be taught?
COMBINING INTUITION AND RATIONAL DECISION MAKING
Can we combine rational and intuitive decision making to form the
  best approach that can handle important decisions?

People tend to leap to an immediate intuitive choice, but according to
  Thagard (1999) people should follow a procedure which he calls
  an Informed Intuition model:

It combines the strengths and avoids the weaknesses of the intuition
    and the rational or calculation models of decision making.

• Like the intuition decision making model, it recognizes that
  decision making is an unconscious process that involves emotions.

• Like the calculation or rational decision making model, it aims to
  avoid decision errors caused by unsystematic and unexamined
  intuitions.

                 HUL 204 Leadership, Decision making, and Communication in Organizations
       INFORMED INTUITION PROCEDURE
Informed Intuition is a much more complicated process of decision
   making, but here are the steps:
• Set up the decision problem carefully. This requires identifying the
   goals to be accomplished by your decision and specifying the
   broad range of possible actions that might accomplish those
• Reflect on the importance of the different goals. Such reflection will
   be more emotional and intuitive than just putting a numerical
   weight on them, but should help you to be more aware of what you
   care about in the current decision situation. Identify goals whose
   importance may be exaggerated because of emotional distortions
• Examine beliefs and assumptions about the extent to which
   various actions would facilitate the different goals. Are these
   beliefs based on good evidence? If not, revise them.
• Make your intuitive judgment about the best action to perform,
   monitoring your emotional reaction to different options. Run your
   decision past other people to see if it seems reasonable to them.
                   HUL 204 Leadership, Decision making, and Communication in Organizations
           IMPORTANCE OF COMMUNICATION
          IN INFORMED INTUITION PROCEDURE
INFORMED INTUITION is not so objective as the calculation model, in which
the numerical weights and calculations can be laid out on the table for all to
see the decisions. Consequently communication about the relevant goals
and actions is more difficult. Ultimately, the individual decision makers will
have to make decisions based on their own intuitive judgments about what is
the right thing to do. The members of the group may be poor at specifying
the emotional weights they put on different goals, and they may be unaware
of their assumptions about the extent to which different actions facilitate
different goals.

Achieving consensus among a group of decision makers may require
extensive discussion that reveals the goals and beliefs of decision makers to
themselves as well as to others. It is much easier to identify emotional
distortions in others than in yourself. The discussion, including the exercise
of working through a calculation together, may help the members of the
group converge on evaluations of goal importance and belief plausibility and
eventually produce a shared reaction of emotional coherence.

                   HUL 204 Leadership, Decision making, and Communication in Organizations
              INTEGRATED DECISION MAKING
Sauter (1999): Managers have four decision making styles:
• Left brain style
• Right brain style
• Accommodating style
• Integrating style

Intuition itself has six forms:

• Illumination
• Detection
• Evaluation
• Prediction
• Operative intuition
• Creative intuition

                 HUL 204 Leadership, Decision making, and Communication in Organizations
DECISION SUPPORT SYSTEMS FOR INTEGRATED DECISIONS

• Provide actual and/ or virtual experience

• Track experiences

• Use data mining tools to filter and reduce data

• Use data analyses tools

• Present data so that intuition is facilitated

• Stimulating and testing intuition:
  - Decision makers must „Understand what they know‟
  - Decision makers must „Understand underlying assumptions‟
  - Decision makers must be able to test assumptions

• Use electronic support for memory, providing access at all times
        HEURISTICS FOR INTUITIVE DECISION MAKING
Heuristics are rules of thumb used for quick, intuitive decision making.
They, however, do not guarantee a solution.

Conditional reasoning: If...then... choices are tricky, but reduce alternatives.

Emotions in decision making: Use the emotionally appealing alternative.

Formulating intent: Go according to your goals / intentions.

Perceived ownership effect: If I can put my hands on it, then I believe I own it.

Short cut decisions: We take short-cuts to save time.

Size heuristic: „Big‟ is „beautiful‟.

The price quality heuristic: Expensive seems better.

Two stage decisions: Decisions are often done in two stages, filtering out the
many before focusing on the few.
       CONCLUSION: INTUITIVE DECISION MAKING
Matzler, Bailom, and Mooradian (2007): Intuition “is not a magical
 sixth sense or a paranormal process; nor does it signify either
 random and whimsical decision making or the opposite of
 reason. Rather intuition is a highly complex and highly
 developed form of reasoning that is based on years of
 experience and learning, and on facts, patterns, concepts,
 procedures and abstractions stored in one‟s head”.

Cultivation of intuition requires:
   • Experience
   • Networks
   • Emotional Intelligence
   • Tolerance
   • Curiosity
   • Understanding limits
                 HUL 204 Leadership, Decision making, and Communication in Organizations
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