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In a recent article for Fast Company, Liz Funk writes about the secret weapon we all have in making big decisions—gut instinct.
Funk recommends a few practices for harnessing the power of intuition at work, including building a routine around reflection time and setting a window in which to make the decision.
These are good guidelines. But do they hold up for major decisions, the kind CEOs and executive leaders are often called to make—risky, sometimes irreversible decisions like merging with another credit union, expanding into a new market, or throwing major resources into a mobile strategy?
If you’re making a call that will affect the viability of your credit union—and perhaps the livelihoods of dozens or hundreds of people—is “going with your gut” a defensible strategy?
When you talk to CEOs about making these kinds of decisions, they will indeed often refer to relying on a special feeling that something was the right course. When I face these big decisions myself, I do listen to my instincts, but I also rely on two resources to test them before moving forward.
1. Assign a devil’s advocate for big decisions. Dissent is important. Take this great quote (brought to my attention by Vistage CEO Frank Fabela in an article for Fortune) from GM’s Alfred P. Sloan, as related by Peter Drucker:
“‘Gentlemen, I take it we are all in complete agreement on the decision here.’ Everyone around the table nodded assent. ‘Then,’ continued Mr. Sloan, ‘I propose we postpone further discussion of this matter until our next meeting, to give ourselves time to develop disagreement and perhaps gain understanding of what the decision is all about.’”
I have learned to take a similar approach, assigning a devil’s advocate for every big decision, usually a senior leader in the organization. This can be a very valuable. By looking for all the things that can go wrong and probing the assumptions, your devil’s advocate will make the proposed decision better thought-out or reveal that the decision was ill-conceived. (Read an article with decision-making tips, including appointing a “contrarian.”)
2. Get an outsider’s opinion. Second, I have found it critical to get the perspective of people who are not emotionally attached to the decision. Often, their wider perspectives will provide a better path forward than would views from individuals who are in the heat of the battle. Reaching out to mentors and peers who have faced similar issues can provide key insights that might otherwise be neglected.
One of the toughest decisions I have faced came during negotiation of the sale of NetQoS, the company I co-founded and ran for nearly 10 years. We had set a specific goal of selling for $200 million, but after a little back-and-forth we received a “final” offer of $180 million from the acquirer. This was in May of 2009, with the economy sputtering, so it would have been reasonable to accept the offer and call it a victory. However, something bothered me about coming in short of our goal.
Without revealing the acquirer, I reached out to the members of my CEO peer group for guidance. The process of talking through the issues with a group that was not emotionally connected to the transaction provided the clarity I needed. I recommended to the board that we pass on the offer. Six weeks later the acquirer returned to the table with an offer of $200 million. While things could have turned out differently, I was confident that I had made the best decision possible because I’d taken the time to get an outside perspective.
Listening to your gut is a big part of leadership, but when you face a high-stakes decision, I recommend fostering some healthy dissent and getting input from a disinterested party. On my own leadership journey, this practice has helped me feel more confident and prepared when making those difficult calls that, for better or worse, come with the job.
Joel Trammel is CEO of Khorus.
