However, David Kahneman, noted psychologist and winner of the Nobel Prize in Economic Science, demonstrated that intuition often produces quick but incorrect decisions.
Here is an example. A ball and a bat costs $1.10. The bat costs one dollar more than the ball. How much does the ball cost?
If you answered 10 cents, you gave an intuitive, typical and INCORRECT response. If the ball costs 10 cents and the bat one dollar more, the bat would cost $1.10 making the total cost of the ball and bat $1.20 ($.10 for the ball and $1.10 for the bat).
Do not fret too much if you missed this one. Fifty percent of Harvard, MIT and Princeton students also incorrectly answered “10 cents.”
Intuition may serve leaders well for routine, simple decisions. However, leaders who rely on intuition when deciding complex, high-risk issues fare about as well as gamblers drawing to inside straights.
To thwart missteps based on intuition, effective decision makers insist on good data. Further, they seek “second opinions,” from trusted colleagues who have the courage to speak truth to power.
FYI, the answer to the bat and ball riddle is, “5 cents.” A bat, costing a dollar more, would cost $1.05. Thus, 5 cents for the ball plus $1.05 for the bat ($1.00 more than the ball) equals the total cost of $1.10.