An insightful review of Michael Mauboussin’s new book, Think Twice, focuses on decision-making, and, specifically, the making of bad decisions.
As Susan Berfield, the Businessweek reviewer emphasizes, one of of the most galling aspects of the financial crisis is that intelligent people made so many decisions that later seemed pathetically wrong.
Mauboussin argues that in order to make good decisions you often have to think twice, a task that we’d rather not do. The reviewer surfaces a number of highly relevant decision-making rules, but emphasizes one that’s hot today: intuition. Research suggests that intuition is really swift pattern recognition based on experience. In other words, smart intuition is a skill that comes along after years of successful development and experience. Gut feel, which some claim early on, has little potential for accuracy. I’ve referred in the past to a wise, inexperienced MBA whose boss kept urging him to go with his gut. My client, the new MBA, said he hadn’t had enough experience to have trustworthy intuition. An astute, even wise personal assessment!
Although many are familiar with the differences Gladwell suggests in Blink, Mauboussin is more scientifically accurate in his recommendations: "Intuition only works well in stable environments, where conditions remain largely unchanged, where feedback is clear, and where cause and effect are linear.”
We can train our gut to produce more reliable responses, but as the author suggests, I think it’s wiser to recognize the limits of intuition.
