New Research Says CEOs Should Follow Their Intuition

In a business environment increasingly focused on machine-generated data, intuition continues to play an important role in the executive decision-making process.


When faced with an important business decision, should CEOs rely more on intuition or data analytics?

New research by Dr. Jay Liebowitz, Distinguished Chair of Applied Business and Finance at Harrisburg University of Science and Technology, and colleagues from Queen’s University in Canada (Yolande Chan, Tracy Jenkin, Dylan Spicker), Warsaw University of Life Sciences in Poland (Joanna Paliszkiewicz) and University of Rome, Sapienza in Italy (Fabio Babiloni) found that in a business environment increasingly focused on machine-generated data, intuition continues to play an important role in the executive decision-making process.

The case is mounting for the benefits of using intuitive awareness at the C-Suite level. A 2016 KPMG study found that only one-third of the 2,200 CEOs surveyed trusted their data and resulting analytics, and according to the PwC Global Data and Analytics Survey, 59 percent of decision makers say the analysis they require relies primarily on human judgment rather than machine algorithms.

Daily, business executives are bombarded by discussions of big data and analytics, as consultants assist them in creating data-driven organizations. What’s missing from these conversations, however, is how intuition remains an important part of the decision-making process.

The Liebowitz et al. study of 172 responses–65 percent of C-Suite executives and 12 percent directors across four countries (U.S., Canada, Italy and Poland)–found that while less experienced employees prefer to rely on data and EQ to make decisions, experienced executives tend to use inferential intuition, which refers to judgments based on decision-making processes that were once analytical but have become intuitive with practice.

Both sides have pros and cons. Executives may be accused of “ignoring the data,” while those with less experience lack the big picture insight to develop plausible models and interpret the results. Yet, both bring important strengths to the decision-making process. For example, executives’ inferential and holistic big picture intuition can help give sense to the numbers and models. Instead of a conflictual tug of war between data analysis and intuition, changing the analysis and decision-making process to take advantage of the different styles may result in more effective decisions.

Interestingly, the study also identified that North American executives prefer to trust their inferential intuition more so than their European counterparts, even when controlling for years of experience, role, gender and industry. If cultural differences can affect decision-making styles, this easily makes (yet another) case for the need for enhanced diversity at all levels of the organization.

Nevertheless, the research shows that executives apply their intuition in order to gain greater confidence in their decision making. Listening to their body signals can also improve their intuitive executive awareness. This complements their use of data and analytics when making executive decisions. In The Intuitive Executive: Understanding and applying ‘gut feel’ in decision-making, Sadler-Smith, an expert in executive intuition-based decision making, suggests the following for improving intuitive executive awareness:

• Elicit good feedback. Seek feedback on your intuitive judgments to build confidence in your gut feel.

• Get a sense for your batting average by benchmarking intuitions and seeing how they may be improved.

• Play devil’s advocate. Test intuitive judgments; raise objections to them; generate counter-arguments; probe how robust your gut feel is when challenged. Capture and validate your intuitions.

More details on using intuition in decision making can be found in the book, How Well Do Executives Trust Their Intuition.

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