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One in four managers makes strategic decisions based on gut feeling. Here’s an expert’s advice on what they should do instead.
“Knowledge is the be-all and end-all. The more you know, the less your decisions rely on gut feeling,” says Christian Zittenbaum, education specialist at Dun & Bradstreet Academy.
In a report conducted by Kairos Future on behalf of Dun & Bradstreet, 25% of the managers surveyed said that they base their decisions on gut feeling – rather than on other evidence such as data. This comes as no surprise to expert Zittenbaum: “Decision-making on the basis of gut feeling occurs in the absence of two things: knowledge and decent data. At the same time, we’re all human and not devoid of all feeling. The heart and brain both play a role, and sometimes it’s not always the ‘right’ one that wins out, for example, when doing business,” he says, and paints a typical scenario: “If you’ve been working with a customer for a long time and all of a sudden there are indications that things aren’t quite as they should be, gut feeling can take over. For example, you continue to give the company credit even though you would never do the same thing with a new customer in the same financial situation.”
So what should you do instead? According to Zittenbaum, who has been training businesses to spot rogue customers for over 14 years, it’s important to always follow three basic principles:
* Collect more information about the customer you’re checking
– Gut feeling may be due to a lack of information, so try to get more information so that you’re better placed to make a good, sustainable decision.
* Dare to ask
– If you’re unable to interpret the information you have in front of you about a company, have the courage to ask someone who can.
* Knowledge is everything
– The more information you collect about how to interpret the information accurately, the fewer decisions you have to make based on gut feeling.
At the same time, gut feeling shouldn’t be excluded from decision-making altogether, according to Zittenbaum. This issue is often raised when he gives lectures on financial fraud and money laundering:
“A participant might say: ‘I just know this company is dishonest, but I can’t quite put my finger on the reason why’. So gut feeling can often trigger a feeling that something isn’t right, without you actually knowing exactly what. Then you have to search for more facts that justify the thesis, which is where InfoTorg comes in,” he says.
Getting support from – and interpreting – the data from InfoTorg can be crucial in making a decision:
“I think knowledge of how to interpret the information accurately is crucial in making the right decision. For example, if there are a lot of warning signals about a company, it is often due to a lack of knowledge and experience if they go unnoticed.”