Gut-feeling is a tremendous quality of good leaders. It enables them to make decisions when complete information is unavailable (which is nearly always). But too much of a good thing can degenerate into its contradiction. That is why leaders should become ‘knowledgeable skeptics’.
Leaders should act like scientists. That is suggested by Stefan Thomke, a Professor at Harvard Business School, and Gary W. Loveman, a former chairman and CEO of Caesars Entertainment, in a joint article for Harvard Business Review, May-June 2022. They state that managers too often base their decisions “on assumptions that have never been critically examined, much less challenged”. They “live in a feedback loop of positive reinforcement” and “overrely on intuition and personal experience in decision-making – even when the evidence contradicts them”. Instead, they should “develop a culture of curiosity, where poking holes in the industry’s wisdom became not only acceptable but celebrated”.
They propose five elements of the scientific method:
- Be a knowledgeable skeptic. Always question assumptions. Seek independent confirmation of facts, place more value on expertise than on authority, examine competing hypotheses.
- Investigate anomolies, things that are unexpected, seem strange, don’t cohere with expected outcomes.
- Articulate testable hypotheses that can be quantifiably confirmed or disproved. “An experiment that produces evidence contradicting a hypothesis allows us to recognize errors in our thinking and judgment, modify the hypothesis, and then retest it.” This iterative process lead to stronger hypotheses.
- Produce hard evidence.
- Probe cause and effect. Don’t confuse correlation with causation. Aks what-if questions and think about counterfactuals (Would B have occurred if not for A?).
Leaders shouldn’t forsake their gut-feeling but their decisions will be better if assumptions are challenged and tested. It won’t make decision-making processes easier, it might lead to irritation for leaders who are used to get their way, but it will lead to better results for the organization.