Should Entrepreneurs Trust Their Guts?

Let’s say you’re interviewing a new applicant for a job and you feel something is off. You can’t quite put your finger on it, but you’re a bit uncomfortable with this person. She says all the right things, her resume is great, she’d be a perfect hire for this job — except your gut tells you otherwise. Should you go with your gut?

In such situations, your default reaction should be to be suspicious of your gut. Research shows that job candidate interviews are actually poor indicators of future job performance.

Unfortunately, most entrepreneurs tend to trust their guts over their heads and give jobs to people they like and perceive as part of their in-group, rather than simply the most qualified applicant. In other situations, however, it actually does make sense to rely on gut instinct to make a decision.

Yet research on decision-making shows that most startup founders don’t know when to rely on their gut and when not to. This is the kind of challenge I encounter when I consult with companies on how to handle workplace relationships, based on research on best decision-making practices in business contexts.

The reactions of our gut are rooted in the more primitive, emotional and intuitive part of our brains that ensured survival in our ancestral environment. Tribal loyalty and immediate recognition of friend or foe were especially useful for thriving in that environment.

In modern society, however, our survival is much less at risk, and our gut is more likely to compel us to focus on the wrong information to make the workplace and other decisions.

For example, is the job candidate mentioned above similar to you in race, gender, socioeconomic background? Even seemingly minor things like clothing choices, speaking style, and gesturing can make a big difference in determining how you evaluate another person. Our brains tend to fall for the thinking error known as the “halo effect,” which causes some characteristics we like and identify with to cast a positive “halo” on the rest of the person, and its opposite the “horns effect,” in which one or two negative traits change how we view the whole.

Yet, just because a person is similar to you does not mean she will be the best employee. The research is clear that our intuitions don’t always serve us well in making the best decisions (and, for a business person, bringing in the most profit).

Scholars call intuition a troublesome decision tool that requires adjustments to function properly. Such reliance on intuition is especially harmful to workplace diversity and paves the path to bias in hiring, including in terms of race, disability, gender, and sex.

Despite the numerous studies showing that structured interventions are needed to overcome bias in hiring, unfortunately, business leaders and HR personnel tend to over-rely on unstructured interviews and other intuitive decision-making practices.

Due to our overconfidence bias, a tendency to evaluate our decision-making abilities as better than they are, leaders often go with their guts on hires and other business decisions rather than use analytical decision-making tools that have demonstrably better outcomes.

Fortunately, recent research in these fields shows how you can use pragmatic strategies to address these dangerous judgment errors, whether in your professional life, your relationships, your shopping choices, or other life areas.

You need to evaluate where cognitive biases are hurting you and others in your team and organization. Then, you can use structured decision-making methods to make “good enough” daily decisions quickly; more thorough ones for moderately important choices; and an in-depth one for truly major decisions.

Such techniques will also help you implement your decisions well, and formulate truly effective long-term strategic plans. In addition, you can develop mental habits and skills to notice cognitive biases and prevent yourself from slipping into them.

One good specific fix is to note ways in which the applicant is different from you — and give them “positive points” for it — or create structured interviews with a set of standardized questions asked in the same order to every applicant.

Let’s take a different situation. Say you’ve known someone in your startup for many years, collaborated with her on a wide variety of projects and have an established relationship. You already have certain stable feelings about that person, so you have a good baseline.

Imagine yourself having a conversation with her about a potential collaboration. For some reason, you feel less comfortable than usual. It’s not you — you’re in a good mood, well-rested, feeling fine. You’re not sure why you’re not feeling good about the interaction since there’s nothing obviously wrong. What’s going on?

Most likely, your intuitions are picking up subtle cues about something being off. Perhaps that person is squinting and not looking you in the eye or smiling less than usual. Our guts are good at picking up such signals, as they are fine-tuned to pick up signs of being excluded from the tribe.

Maybe it’s nothing. Maybe that person is having a bad day or didn’t get enough sleep the night before.

However, that person may also be trying to pull the wool over your eyes. When people lie, they behave in ways that are similar to other indicators of discomfort, anxiety, and rejection, and it’s really hard to tell what’s causing these signals.

Overall, this is a good time to take your gut reaction into account and be more suspicious than usual.

The gut is vital in our decision-making to help us notice when something might be amiss. Yet in most situations when we face significant decisions about workplace relationships, we need to trust our head more than our gut in order to make the best decisions.

Dr. Gleb Tsipursky is CEO of the training, coaching, and consulting firm Disaster Avoidance Experts empowers entrepreneurs to avoid business disasters by addressing potential threats, maximizing unexpected opportunities, and resolving persistent personnel problems. He’s a best-selling author of Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters.