These days there is so much fuss about making data based decisions. When should gut feelings come into play in decision making?
As someone that's worked at various stages of the early stage innovation funnel, I can attest that there are a lot of decisions made with limited data. Ambiguity is simply the nature of the business. However, I would argue that gut feelings should be used sparingly. There may be cases where gut feelings come into play. One area might be during an interview when you're trying determine whether or not a candidate will mesh well with the team. But in those cases I'd simply use the gut feeling as one data point. What I'd recommend is considering the decision as a rational call about what risks you are willing to take. In a lot of cases, you won't have the data to buy-down the risks so it'll be assessing scenarios to see what could happen, both good and bad. It may not give you a clear "right" answer, but you'll at least you be able to weigh the pros and cons so you can make an informed decision about what path best fits your goals, strategy, and risk tolerance. How one does that is a whole other can of worms, but it's a fun discussion to have and I'm happy to chat more if you'd like.
Validate, Validate, Validate, and Validate one more time. Score for positive sense of idea/concept
Gut feel is .25
Your Gut Feel and a Inside Industry Peer is .50
Outside Peers = .75
Potential Clients = .90
Potential Orders = 1
Real Orders = 110%
Get to a score of 1 or better and you may have a winner if you can execute, to execute you will need resources, Money, People, Materials, Intelligence, and a Ton of Energy.
You will also need to be able to take rejection well, and also under stand the rule of 9. Rule of 9 is the multiplication of; it will take you 3x the time you estimate, and 3 times the cash to get to a steady state of running. So you will need 9 times the energy, force, passion to get to where you want to be.
Gut feelings only comes into picture when you cannot conclude anything precise from the data and you are bound to take decisions.
It is a question of using your "gut" with guidance.
Data needs to be understood and applied within context anyway, that is where the human factor enters. So when your gut is giving you ideas, think of it as a new direction worth exploring.
One point of guidance should always be how a decision positively impacts your clients. Even where it is an internal business decision, look at your clients' needs and priorities and ensure your decision makes a positive difference. This is one way to complement data with "guided gut".
Let's start with the assumption that you know your business cold. If that's the case, go with your gut every time.
Here's why: Whether you're running a big or small business, you must know it inside and out - you know every business process and the needs and wants of your people, the strengths and weaknesses of your sales team and, most important, the sales and profit contribution of your key customers. You're in touch with those customers and know why sales went up or down before you see the numbers from your finance team, accountant and IT department. Month and quarter end numbers don't surprise you because you monitor KPIs on your executive dashboard daily. When you notice a questionable number on a dashboard or financial report, you dig deeper to ensure you understand it. Finally, you have a vision for where you want to take your business. If all that's true, you can make gut decisions without having to look at reams of numbers which you already understand and experienced first hand. If you don't trust your gut something's wrong. If that's the case, call a consultant like me to help you figure out why.
In my experience coaching hundreds of people, anytime you go against your gut (aka intuition) you will lose. Data is important to consider, but your gut often knows the path.
They come into play when you can't get enough data to support your decision. Or all the time, if you have an unlimited amount of money.