Stephen H Baum Leadership

Most entrepreneurs are proud of decision-making by intuition. Some are more “plan-ful” than others. It gave me to wondering how to think about this.

Jonah Lehrer’s book: “How We Decide” is a great read. It reinforces the idea that intuition is often based on real data available only in our subconscious.  We over-think and go against intuition in this case at our peril. By the way, it is a great read with riveting stories as well as insights from neuroscience. For more from this insightful writer, visit his website:

jonah lehrer\’s website

At a recent IMCA conference, (terrific) speaker Professor Michael Mauboussin of Columbia University asserted that intuition fails when the situation is highly complex, involves many variables and is non-linear. His book is “Think Twice — How to Avoid Investment Mistakes.” Mauboussin’s website might be called Think Twice

At another conference at the Hastings Law School in San Francisco, Professor Baruch Fischhoff of Carnegie Mellon offered a more comprehensive view. He described six conditions leading to faulty intuition. The first is the “common knowledge” effect (we follow others’ choices because everyone must know this, we think — but they dont). The second is a false consensus effect (again, going with the herd). The third is a fundamental attribution error (an article may cite a source and have it wrong). Of course we must include self-serving biases. Then there are myths (age-sensitive attitudes toward risk such as a belief in our own invincibility). And finally what he calls “disrupted feedback” which I believe he means when the chain of observations is missing key data.

Fischoff goes on to suggest when our judgment is impaired, among other things, because people are just not good at detecting sample bias, knowing what we know and don’t know, escaping our emotions to another emotional state and confusing someone else’s ignorance with stupidity. Prof. Fischhoff has written a lot about this topic.

With advances in behavioral sciences and especially neuroscience, we are learning a lot about ourselves. More on this topic soon. In another post, I will provide a reading list.