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When To Use Research vs. Intuition in Business (and Vis Versa!)

when-to-use-research-vs-intuitionMaking decisions as a small business owner can be tough. In a market where competition is fierce, and one small mistake can spell disaster, how should one’s decision best be informed? Is it to use intuitive sensing, that gut feeling that something is either good or bad, even if you can’t tell why; or should you trust rationality, and look at the known facts to make an even handed judgement? The answer is that both of these approaches are valid, depending on the situation. In this post we’ll explore the differences between research and intuition in business, and show you how and when to use each process.

When to Use Research vs. Intuition

Intuition is experienced based knowledge that is tied to emotional states. It’s that sense of knowing what to do or how to do it, without being able to fully explain why you feel that way.

Neuroscientists have found that when our unconscious mind encodes new experiences to memory, it will simultaneously attempt to predict the outcome of an event by comparing it to previous experiences. This unconscious comparing and predicting is what causes us to have an intuitive “gut” feeling.

It would seem then, that the more similar experiences we have in our memory to compare too, the better our intuitive judgement will be. But how we encode and compare memories is what can make intuitive judgements less reliable than we feel they are. “‘It can be a matter of smells, gestures, an ineffable combination of impressions that makes what we call intuition tell us something,’” says Lars-Erik Björklund to Science Daily.

Because of this, something as benign as the temperature of a room, or the scent of someone’s cologne — if tied to past memories — could trigger an intuitive prediction of either a good or bad outcome. But it’s not all random. “These memories are stored only if they affect us,” so passion and commitment to something can greatly improve the odds that an intuitive feeling is correct.

When Making Financial Decisions

Gaining or losing money can be an emotional experience for anyone. Just think back to a time you may have lost a bet, or perhaps found a $20 bill on the sidewalk. How did it make you feel? Excited? Nervous?

It’s never a good idea to gamble with your business, and leaning too heavily on your intuition when making financial decisions can be just that, because it can lead us into making predictions about future events we can’t anticipate. Therefore, when making financial decisions, try to distance yourself from the outcome, and make a best choice based only on the information available to you.

The caveat here is that if you actually are gambling, your intuition can help you more than you think. Among people asked to complete the Iowa Gambling Task, those with high IQs consistently score worse than others. Researchers hypothesize that happens because those with high IQs would try to ignore their intuition while playing, and attempt to make “rational” choices in a game that is irrational by design.

When Making Marketing Decisions

While it might seem counter-intuitive, research trumps going with your gut when making marketing decisions.

Think of it this way: An effective advertisement is one that elicits an emotional response from its target audience. In trying to reach this audience, marketers have a huge amount of information available to them: industry information, market research, analytics, etc. And this data doesn’t reflect how just one person might respond to a piece of marketing, but a whole segment of a demographic.

As a business owner, you need to keep in mind that it isn’t how you feel about a marketing effort that matters, but rather how your audience will respond to it. If you want your marketing to be an investment, rather than a cost, it’s best to set aside your ego and go with the data.

Your Brand, Your Values

You likely started your company with a vision in mind. You have ideas about how you want things to run, and about how you want to be branded. These things were the spark that led you to start your business in the first place. Hold them close.

Compromises are as much a part of business as they are of life. But you should never compromise your standards. So if something looks good on paper, but you have a strong feeling otherwise, look closer! Intuition about what is and isn’t good for your brand/company as a whole is always worth listening to if you want your company to succeed in the long term.

A decision based on research only works if you have the right information, so if something looks good on paper, but there are alarm bells going off in your head, try to identify whether there is something you’re missing. For example, maybe a new marketing campaign promises to deliver a high return on investment in the short term, but still feels ‘off’ to you. Is it on message? Or does it compromise your brand’s long term goals for a short term payoff?

While both can be powerful decision making tools, neither research nor intuition are perfect strategies. Data and statistics can be skewed or inaccurate; while the true origin of an intuition is unconscious, and unknowable. Ultimately, accounting for the strengths and weaknesses of each approach will help you make the best business decisions.



The Oregon Small Business Development Center Portland Community College has  helped thousands of businesses over the past 30 years. We combine one-on-one  advising with programs taught by business experts, giving our clients the  resources they need to grow their businesses. We’ve celebrated many successes  with our clients. We'd love to celebrate your success. 

Topics: Professional Development, Small Business, Growing a Business

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