Sunday, September 11, 2005

Decisions based on Intuition vs. Data

In today's Sunday New York Times, there is an article in the business section devoted to Sanford Weill, of Citigroup. There I find this quote:

He was largely intuitive and his deals didn't come from plotting, planning and study; they came from his own instincts and connections.

And in the eGang group this month, Barry Diller explained why he bought his first web company, he wasn't sure why, "It was nothing but instinct." In contrast, the biography of another self-made billionaire, Warren Buffett, starts with a description of how obsessed he is with numbers, with data, with information.

One of the questions a colleague of mine asks in job interviews is, On a scale of 1 to 10, do you make decisions based on data (1) or intuition (10). I liked this question. I answered 10. I make my decisions almost entirely based on intuition. Data, as I see it, can be molded to fit any agenda, and is based only on the past. Most decisions will impact only the future. Data is a good slave, but a poor master. And of course, there are decisions you have to make based entirely on data, i.e. this insurance policy provides the same coverage as that insurance policy, but is $500 cheaper.

The interview question is a bit of a trick question, however. It is more of a test of the person's ability to make decisions, to be decisive. The worst answer you can give is 5.