Most of us have been told since childhood to go with our first instinct if we were uncertain about the answer to a multiple-choice test question or any similar dilemma. If we became indecisive and changed our first answer, we were advised, the odds were greater that we would be wrong.
In the business world, gut feel, an extension of that same first-instinct belief, is all too often considered a legitimate solution to similar problems with no clear answer. On occasion, I must admit, Ive been guilty of that myself.
It turns out that first-instinct guesses are not always the best. Tim Harford points out in a recent Undercover Economist column for the Financial Times that there have been studies since the 1920s which show that such go with your gut decisions do not necessarily lead to the best results.
A study by Justin Kruger, a psychologist at New York University, with co-authors Derrick Wirtz and Dale Miller, explains why, as Harford says, Most people would advise that the initial answer is usually better than the doubt-plagued second guess. Harford goes on to say that the majority of students, instructors and advisors believe and promote the first answer, even though research proves it unreliable and generally incorrect.
Krugers studies explain the first instinct fallacy by observing that we easily remember first decisions when they turn out to be correct, but forget those which were wrong. We tend to minimize our failures and exaggerate our successes. But when we switch answers, Harford writes, We starkly remember the times we changed things for the worse, and we more easily forget the times when we failed to change things for the better.
These studies consistently show that test takers who change their initial guesses usually improve their scores.
A publication by The American Psychological Association also mentions Krugers comments about the reluctance of people to change first decisions: Take the example of switching into a grocery store (checkout) line that appears to move faster. Most people have the intuition that as soon as they switch, the new line slows down and their old one speeds up. Are the gods punishing us for our impulsiveness? Probably not. A better explanation might be that moving over into an even slower line is more frustrating and memorable than just staying put in a dud line, much the same as test-taking.
Other APA comments on this subject point out that, People are reluctant to question their intuition even when reason suggests they should. They are quick to accept intuitive answers that would be proved wrong by a moment of reflection and erroneously believe it is better to stick with their intuitive answers when subsequent deliberation or considerable external evidence suggests that it is wrong.
And, Individuals with higher levels of self-esteem believe more strongly in the decision to change answers or, by extension, to follow a given entrepreneurial opportunity.
Now were talking; these studies also clearly relate to business. We can learn something here.
Jack Goodhue, management coach, may be contacted at goodhue@aol.com.