But at the same time it acts pretty autonomously—there is no little person inside our brains making decisions and pulling the strings. We learn, in essence, by fumbling through the dark and stumbling eventually into success. That pretty much sums up my leadership style, which is I try to find great people, empower them, and stay out of their way. Did you learn from your failure?
Did you take calculated risks and not over-fail? How is that going to make you a better person and leader or manager in the future? After losing his emotions, Elliott became ineffective at making good decisions. Despite remaining in the 97th percentile for IQ, he lacked all motivation and became paralyzed by every decision in life.
He lost the coupling of bodily arousal with decisions; and even though he maintained normal intellect he suffered a recurrent failure to learn from negative feedback.
He lost his wife, his job and his savings from bad decisions. He was unable to prioritize tasks, spending too long on one thing or drifting onto another.
It turns out, our gut feelings are not only valuable guides when making decisions, they are essential. We like to think data-driven decisions are formed by a rational, cognitive process within your brain. But when you are presented with complex or conflicting information, your cognitive abilities often become overloaded. At this point, your gut feeling takes over to guide you towards the best decision. Data and our gut should go hand in hand.
At the same time, decisions based purely on emotion should always be supported by data. The reality is that our decisions are not driven by data, they are informed by data and based on several variables beyond data, including somatic markers intuition , past experiences, judgement and context. Our interoceptive sensations start firing when we encounter a stimulus that requires our attention. The sweaters keyword has the most impressions and clicks by far, so it seems logical to pump more money into it.
You want to use all the data at your disposal to either support or disprove your gut feeling before moving forward. Based on the conversion report, you learn that sweaters has extremely low conversions despite having the most clicks and impressions. The sweaters keyword is a bad investment.
By visualizing the data in a tool like DataHero, you can quickly identify outliers or inconsistencies that elicit both rational and emotions reactions. Toggle navigation. And that distinction is not made in most of economics and most of the cognate sciences. And people believe that they could model or reduce all uncertainty to risk. And a man comes in and you believe he can speak. But he feeds you.
Next day, he comes again, and you fear he kills me, but he feeds you. Third day, the same thing. By any standard probability models, the probability that he will feed you and not kill you increases day by day, and on day , it is higher than any before.
For instance, the models value of risk. The same thing had happened. The confidence increased year by year, it will go on like that. Then shortly before the crisis, it was highest, same thing.
These type of models can not protect or have not predicted any crisis and missed everyone. When the world is stable. They are like, if you have an air break in your car that works all the time except you have a car accident. The alternative is to investigate a way to deal with uncertainty.
So we need to go away from probability theory and investigate smart heuristics. I have a project with the Bank of England called Simple Heuristics for a safer growth of finance.
Gut Feeling (The Life I Lead Book 1) - Kindle edition by Winifred Brielle. Download it once and read it on your Kindle device, PC, phones or tablets. Use features. 1. GUT. FEELINGS. We think of intelligence as a deliberate, conscious activity guided by the laws of logic. Yet much of our mental life is unconscious, based on processes alien to logic: gut feelings, This book asks: Where do these feelings come from? Can following your gut feelings lead to some of the best decisions ?.
And we study what kind of simple heuristics could make the world safer. Give you one example. When Mervyn King was still the governor, I asked him over dinner what he thinks. Which simple rules could help. Mervyn said, start with one, which is no leverage ratio above That will not do all the job, but it will bring in some safety in the system.
The more complex your calculations are, like in a big bank, who needs to estimate maybe thousands of parameters to calculate valued risk and a covariance matrix of a million or so, here, the error introduced by these estimates is so big that you should make it simple. And here, the complex calculations may actually pay. So in general, if you are in a uncertain world, make it simple. If you are in a world that is highly predictable, make it complex. How do you figure out how to be guided by them?
And they are not caprice. They are based on lots of experience and unconscious form of intelligence. Today, many look down at intuition or gut feelings and find it suspicious, despite almost everyone relies on that. Typically, the decision maker is buried under a mountain of information, partially contradictory, or you ask yourself why did they give me this information?
And then there is no algorithm.