Intuitions vs formulas

The nobel prize winner Daniel Kahneman in his book, Thinking, Fast and Slow, questions whether we should trust the opinions of experts when they rely on intuition for their decisions. He refers to a joint research project he undertook with Gary Klein; one he terms an “adversarial collaboration” because Klein started with an opposite viewpoint to his. Klein’s contention was that decision-making is naturalistic and therefore intuition should be the starting point of any decision process. However Kahneman’s work on decision-making showed that people are subject to systematic biases that contradict rational choices and ignore probabilities resulting in flawed decisions. So rather than engage in a tit-for-tat academic battle, they agreed to publish a joint paper.

Part of the difference in opinion was due to the different realms in which each had undertaken their research – Klein studied the decisions of professionals working in somewhat predictable environments while Kahneman’s subjects included stock pickers, political scientists and clinicians.

As with many such questions, the conclusion was that it depends on the situation. While they never fully agreed on the answer, Kahneman conceded that intuition can be relied upon but only if certain conditions are present:

  • That the environment is sufficiently regular to be predictable; and
  • The person has learnt the regularities through prolonged practice.

Effectively, intuition is drawing on information that is so embedded that the person has instant access to the answer without having to weigh up options. So professions where intuitive decisions could be considered reliable would include anaesthesiology, sailing, chess, athletics and engineering.

Where the conditions cannot be satisfied such as predicting a future stock price or currency exchange rates, or how well a new recruit will perform, intuition should not be trusted.  In Kahneman’s opinion, the predictor who credits their intuition is likely to be self-delusional or if correct, lucky.

What are the implications for leaders when required to assess the intuitive decisions of themselves and others?  Simply, it means you cannot rely on someone’s level of experience or self-confidence to determine the validity of the decision.  You also need to consider the context and if the environment is unpredictable, the decision should be discounted and substituted with a decision based more on statistical evidence.

Reference: Kahneman D., & Klein, G. (2009). Conditions for intuitive expertise: A failure to disagree. American Psychologist, 64, 515-526.