Monday, October 8, 2007

Go with your gut

Businesses can too often be held back by their absolute determination to be rational about decision making. How do I know this? Simple, my gut tells me. Now, I’m not suggesting that CEOs hold weekly séances or use divining rods to search out opportunities, but I am suggesting that intuition, gut feeling and instinct need to be taken far more seriously than they are. I am astonished that some people (and they are not all economists) still believe that consumer decisions are rational and not emotional. Yet here are two more compelling reasons why this is just not so; one from an English philosopher and the other from a German psychologist.

The English philosopher is John Gray, and in his book Straw Dogs he calculates that “we process perhaps 14 million bits of information per second” and that “the bandwidth of consciousness is around 18 bits”. 14 billion v 18. It’s extraordinary that we pick up anything from anyone. It’s certainly no wonder the tedious listings of benefits on packaging make so few connections with shoppers. Instead of lecturing them, how about attracting them with something they can get fast?
The German psychologist is Gerd Gigerenzer. Malcolm Gladwell used Gigerenzer’s research in Blink to show how snap decisions often get better results than careful analysis. In his own book, Gut Feelings: The Intelligence of the Unconscious, Dr Gigerenzer shows how we do it. Our unconscious sifts through a huge range of rules-of-thumb we have already processed and, virtually instantaneously, makes a decision based on this past wisdom. The best part is that these intuitive feelings lead to high quality decisions, or decisions we are happy about later. Gut Feelings demonstrates that emotion, intuition, speed and the right answer are not as far apart as many people think.