Stop feeling guilty, learn to trust your instincts

We feel we must justify our choices logically. But Rory Sutherland says instinctive decision-making is  what we do naturally and may lead to the best outcomes

It may be a procurement form, asking you to assess four agencies in a pitch. Or an appraisal form. Or a judging form for an awards jury.

In each case, the thing is broken down into seven sections, each demanding a separate score on eight or more different weighted measures: Strategy – 20%, presentation – 10%, execution – 15% ... and so on. ‘Oh, God,’ you think to yourself, ‘do I really have to go through with this shit? Can’t I just decide?’ But you are careful to suppress this emotional reaction, and dutifully complete every section.

The idea behind these forms seems entirely rational. It suggests that the way we should decide on any course of action is by using a ‘balanced score-card’ approach. You take various attributes and then apply a weighting according to the importance of each attribute to the overall decision.

The reason we feel such discomfort when presented with these forms is that, in reality, we do not instinctively make decisions in this way – or few normal people do. When no one is around to insist that we justify our decisions, even our most important choices – whom to marry, what house to buy – are made without recourse to mathematics.

But we never reject the forms when they are handed to us. Or question the methodology ? Why not? Because, even though we hardly ever reach decisions in this way in real life, we feel that we really should. But should we?

This question is important. It is at the centre of a debate encompassing economics, psychology, business and even philosophy . And it is at the centre of a feud in behavioural economics between Gerd Gigerenzer and Daniel Kahneman. This debate should now extend to business and government.

At present, business decisions are not like personal decisions. Unlike real life decisions, business decisions must seem to have been arrived at through some rational, mathematical process. Since numbers enjoy an automatic semblance of objectivity, any mathematical approach will make a recommendation far easier to promote and defend than one arrived at by unquantifiable means. In the event of failure, it is far less likely to result in the loss of your job than one arrived at through instinct. Yet simply because a decision has a great rationale may not mean it is a great decision.

First of all, few important things in life are linear, or even numerically expressible. And few qualities are truly independent. BBH are not being mathematically immature when they say a great advertisement is ‘99% idea – and 99% execution’ – they are actually showing a very good understanding of how interdependencies work.

In real life we make decisions not with numbers but with heuristics. Rules of thumb which, though less amenable to numerical notation, seem to work. We choose by deploying one heuristic first and, in the event of a draw, move on to another.

What makes Gerd Gigerenzer’s standpoint so surprising is that he thinks that our real-life, instinctive modes of decision-making may not always be second best: in a world of uncertainty they may not only be faster and cognitively more efficient than numerical reasoning, but may produce better decisions.

Just as professional cricketers and baseball players (who instinctively use heuristics) are better at catching balls than mathematicians (who use equations), so the use of heuristics in business may be better than mathematics.

A few years ago I withdrew from buying a house because I did not like the seller, who seemed (he worked in finance) slightly psychopathic. The decision proved good – it later emerged that he had moved the boundary fence. But my use of a seemingly trivial ‘vendor-likeability heuristic’ in a £500,000, 10-year decision would have seemed insane had I been operating in a business context. But I was still right. Arguably, if our bankers had used a simple heuristic – ‘If something seems too good to be true, it probably is’ – rather than complex, self-justifying mathematical models, they wouldn’t have got into such a pickle.

We all known for years that brand fame is a vital aid to sales, but our inner Presbyterian has always worried that consumers are silly being motivated by such things – when they ‘should’ be comparing product attributes and weighting them on a matrix. Yet a Gigerenzerian would retort that, for anyone trying to avoid buying bad products, the use of brand fame as a filter can be a very astute strategy.

If it’s good news for marketers, the same cannot be said for economists. On reading his theories, the Financial Times’ Tim Harford was forced to conclude that ‘Gigerenzer’s rules could mean the end of economics as we know it’.

Rory Sutherland is vice-chairman of OgilvyOne London and Ogilvy Group UK.

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