Each of us makes scores of decisions every day – personal, professional, simple, and complex.  What to eat, where to work, how much to spend on a house, and on and on. Knowing how we and others decide can help us choose, advise, negotiate, and mediate more effectively.

One school of thought, popularized in Eighteenth Century Europe and still prevalent today, is that rationality is the ideal basis for decision-making, and that emotions only cloud the mind. Similarly, classical economics and game theory assume that decision-makers proceed based only on rational self-interest. Faced with experimental results showing that self-interested decision-makers do not achieve ideal economic results, game theorists now refer to “bounded rationality,” without identifying exactly what the bounds are.1

The trouble with the assumption of unemotional, rational, decision-making is that it simply doesn’t fit the known facts.  We are emotional beings. Our emotions influence all our judgments, because our brains’ emotional circuits activate before our rational minds can process incoming information.2

Even more amazing, modern neurobiology shows that we can’t make choices with logic alone.  If part of our brain known as the orbitofrontal cortex is damaged, we become dispassionate, unemotional spectators of the world around us, unmoved by even the most wrenching events. But rather than turning us into perfect reasoning machines, turning off our emotions leaves us incapable of even the simplest decision.  Instead we analyze and re-analyze everything, helplessly going over the pros and cons for hours.  As Jonah Lehrer puts it in How We Decide, “The world is full of things, and it is our feelings that help us choose among them.”3

In part, this is because our emotions can be short-cuts for unconscious deductions and observations we’ve already made. Suppose we are asked to draw cards from three different decks, and each card is worth a sum of money.  Assume that the cards in one deck are worth more than those in the other two. Research shows that well before we realize consciously that the decks are loaded, our emotions toward the “rich deck” become positive, while drawing from the “poor” decks makes us uneasy.4

Of course, following your feelings without knowing why – “trusting your gut” – isn’t always the best strategy. It doesn’t work well for beginners in a field.  That’s because our “gut” depends largely on experience. Our unconscious mind constantly looks for patterns and their consequences, internalizing the lessons of the past. Beginners haven’t internalized the past patterns of success and failure that trigger accurate “gut feelings.”5 They do badly when they guess, and better when they think decisions through.

Experts, on the other hand, generally do worse on when they can’t go with their instinct, and have to slow down and plod through an analysis.6 The expert mind has already sorted through the possible choices, and chosen the best – which it has translated into a gut feeling.7 This is what’s behind the common advice that you should stick with your first answer on a test. Not only will overanalyzing take up valuable time, it will interfere with the work your unconscious mind has already done for you in sorting the choices.

Despite increased evidence for the value of hunches, some theorists are critical, pointing out that for every example of a gut feeling that made someone a superstar, there are examples of utter failure.  While recognizing that intuition shouldn’t be ignored when making decisions, Business consultant Eric Bonabeau notes that intuition is imperfect at best, and may simply represent “me-too” thinking – popular thought that’s no better (and may be worse) than our own careful analysis.8 Bonabeau argues that in this day of advanced decision software, we can rely on computers to help us process previously unmanageable masses of data, to “crunch the numbers” without depending on feelings as a guide.

But not every problem is reducible to perfect data sets.  Some data is unknown.  Some depends on future events, or turns on inherently imprecise estimates of probability.  Sometimes, there’s simply no time for analysis, even if a computer could come up with the ideal answer.  Someone wants an immediate decision. Deal or no deal? Assuming we have to decide quickly and intuitively, how can we maximize our chances of success?

Embrace your mistakes. It turns out that our decisions improve with practice.  Throughout his book, Jonah Lehrer gives examples of successful people – chess masters, pro quarterbacks, television directors, business executives – who routinely make critical, decisions based on “feel.” One thing they share is a habit of reviewing past decisions. Whether they succeed or fail, they report going over previous game tapes, TV footage, chess positions or deal details, asking themselves “How could I have done that better?”  They search for their weaknesses, bad habits, blind spots, and mistakes – trying to improve on even outstanding results.

Practice self-awareness. Are you uneasy during a negotiation because your unconscious mind is telling you a proposal is risky, or is it because you feel inadequately prepared? Either is possible.9 Our brain may be sending us intuitive messages, or responding to other stimuli. We won’t know which unless we make an effort to figure out why we are fearful, or excited, or angry.  Bob Lutz, former President of Chrysler Motors, emphasizes the need for such self-awareness, pointing out that it saved him from disaster during the development of Chrysler’s high-end muscle car, the Dodge Viper.  When the Viper’s design was presented, Lutz was unhappy with it.  He asked himself why, and realized that it was less like Ford’s famed Shelby Cobra (his favorite car) than he expected.  But Lutz realized that he couldn’t simply re-create the Cobra.  The Viper had to be a Chrysler product, and stand or fall on its own.10 The car was a huge success, and Lutz credits it with “saving” Chrysler. If he hadn’t questioned his first impressions of the prototype, the Viper might easily have failed, and the company along with it.

Let your brain relax. Intuition seems to work best when we take time to relax and reflect. Whether it’s a quiet ride, jogging, woodworking, a long, hot shower, or simply daydreaming, many of the top executives Hayashi interviewed emphasized the benefit of regularly engaging in some relaxing activity, during which they could reflect on the events of the past without the distractions of the present.  All work and no play limits intuition.11

Don’t neglect the groundwork. If you’re thinking that a well-developed intuition means you can blithely act contrary to logic, or that you don’t need to prepare for negotiations, you’re wrong.  Klein and Kahneman emphasize that except where instant decisions are needed and there isn’t time, intuition should never be the sole basis for a decision. It’s a piece of data, to be considered and checked against other information.12 Also, remember that our intuition is largely about pattern recognition, and we won’t see the patterns in the data if we fail to gather it in the first place.13 Another reason to gather objective data is to combat cognitive biases.  Human decision-making is, by its’ nature flawed. We call some of these flaws “cognitive biases” – unconscious assumptions that warp our logical decision-making. There are many such biases – overconfidence, naïve realism, the false consensus effect, the endowment effect, and more. The cure for most cognitive biases is simple – objective data from disinterested observers.14 Unless you make an effort to obtain that data, however, even your unconscious decision-making will be tainted by these ingrained errors.

Not every situation lends itself to intuitive decision-making.Even if you’re really good at intuitive decisions, you shouldn’t depend on your gut all the time. Because intuition relies on pattern recognition, Klein and Kahneman advise that where there is no pattern – where a situation is new to us, or where there’s a lack of structure and predictability, intuition won’t be helpful. They also warn that being an expert in a broad field may not be enough. Experience with the particular situation is much more likely to generate an intuitive understanding of what to do.16 Further, no matter how intuitive we are, some decisions are simply better suited to Bonabeau’s number-crunching approach than others.  If the correct answer is essentially a calculation, don’t estimate, calculate – if you have time.

The critical importance of feedback. Objective self-awareness is difficult.  Using those around us as a sounding board helps us know whether our reaction is useful intuition, or (as was the case with Lutz’ initial reaction to the Viper) the hidden “me-too” thinking Eric Bonabeau warned of.  Former Johnson & Johnson Chairman & CEO Ralph Larsen called a team of advisers together any time he felt uneasy about a major decision.17 The goal was to uncover the cause of the bad feeling. But these sessions had a secondary effect.  They improved future decision-making.  Klein and Kahneman note that considering the feedback you received in similar situations can aid in determining whether your gut is helping you or leading you astray.18

If you’re in negotiations alone – that is, if you don’t have a team – retaining a mediator familiar with your industry might help. Not only do such professionals generally have a wealth of diverse experience on which to draw, they are used to serving as sounding boards and generating creative alternatives. Finally, they are usually adept at drawing out hidden thoughts and emotions that are clouding your intuition.

People are not perfect reasoning machines. Our emotions are a necessary and important part of our decision-making, both because they help us choose among alternatives and because they signal our brains’ unexpressed conclusions about the difficult problems we wrestle with. Learning to harness our intuition takes practice, and is rarely the sole basis for an intelligent choice.  But it can be a powerful tool, if we know how to use it.

by Scott C. Van Soye
1 See Sigmund, K. The Loitering Presence of the Rational Actor AMERICAN SCIENTIST (2009). 
2 Zimmerman, P., & Lerner J. S. The Emotional Decision Maker.
3 Lehrer, J. HOW WE DECIDE 18 (2009). Lehrer discusses the role of the orbitofrontal cortex. Id. at 13-18. 
4 Id. at 46-47. 
5 Id. at 49. 
6 Gigerenzer, G. GUT FEELINGS: THE INTELLIGENCE OF THE UNCONSCIOUS 32 (2008). 
7 Id. at 34. 
8 Bonabeau, E. Don’t Trust Your Gut HARVARD BUSINESS REVIEW (2003). 
9 Robert S. Adler, B. Rosen, & E Silverstein, Emotions in Negotiation: How to Manage Fear and Anger 14 NEGOTIATION JOURNAL 2, 161-179 (1998).
10 Hayashi, A. M. When to Trust Your Gut HARVARD BUSINESS REVIEW ON DECISION-MAKING 169, 185 (2001).
11 Id. at 186. 
12 Klein, G. and Kahneman, D, Strategic decisions: When can you trust your gut? MCKINSEY QUARTERLY (2010).
13 Id. at 179. 
14 “Naïve realism” is the idea that one’s perceptions are especially accurate. The “false consensus effect” is the idea that others have the same beliefs, perceptions, and attitudes that we do. The “endowment effect” is the idea that our property is worth more than because it is ours. See Birke, R & C. Fox Psychological Principles in Negotiating Civil Settlements 4 HARV. NEG. L. R. 1, 48-50 (1999).
15 Klein, supra, note 12.
16 Id.
17 Hayashi, supra, note 10 at 176. 
18 Klein, supra, note 12.

Scott Van Soye is the managing editor of ADR Times. He is also a full-time mediator and arbitrator working with the Agency for Dispute Resolution with offices in Irvine, Beverly Hills and nationwide. He is a member of the California Bar, and practiced real estate, civil rights, and employment law for over twenty years. He holds an LL.M. in Dispute Resolution from Pepperdine University, where he is an adjunct professor of law. He welcomes your inquiries, and can be reached at scott.vansoye@agencydr.com or (800) 616-1202, Ext. 721. www.scottvansoye.agencydr.com