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Wednesday, November 21, 2012

Your gut does not always lead you to the best decisions

Do my eyes decive me?

In a recent article, brief description of a key point, your gut may be wrong, was mentioned.  Daniel Kahneman, “Thinking Fast and Slow”, made this case in his best-selling book.  A recent Facebook story told as if by a leading professor and modified a bit, leads you to the same conclusion.  The story is below:

A professor stood before his philosophy class and had some items in front of him. When the class began, he wordlessly picked up a very large and empty mayonnaise jar and proceeded to fill it with golf balls. He then asked the students if the jar was full. They agreed that it was.

The professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. The pebbles rolled into the open areas between the golf balls. He then asked the students again if the jar was full. They agreed it was.

The professor next picked up a box of sand and poured it into the jar. Of course, the sand filled up everything else. He asked once more if the jar was full.. The students responded with a unanimous 'yes.'

The professor then produced two Beers from under the table and poured the entire contents into the jar effectively filling the empty space between the sand. The students laughed..

'Now,' said the professor as the laughter subsided, 'I want you to recognize that this jar represents your life. The golf balls are the important things---your family, your children, your health, your friends and your favorite passions---and if everything else was lost and only they remained, your life would still be full. The pebbles are the other things that matter like your job, your house and your car. The sand is everything else---the small stuff.

'If you put the sand into the jar first,' he continued, 'there is no room for the pebbles or the golf balls. The same goes for life.

If you spend all your time and energy on the small stuff you will never have room for the things that are important to you.

Pay attention to the things that are critical to your happiness.

Spend time with your children. Spend time with your parents. Visit with grandparents. Take your spouse out to dinner. Play another 18. There will always be time to clean the house and mow the lawn.

Take care of the golf balls first---the things that really matter. Set your priorities. The rest is just sand.

 One of the students raised her hand and inquired what the Beer represented. The professor smiled and said, 'I'm glad you asked.' The Beer just shows you that no matter how full your life may seem, there's always room for a couple of Beers with a friend.”

The story above describes how you view the surroundings and make decisions using your gut and intuition.  Such decisions can often be less than optimal.  The use of analytics helps when applied to such events.  Analytics has even become an early trend in investing.  One VC actually raised capital on an analytic tool that uses investment patterns of other VCs.  They review by computer the lead firm and the lead partner making investments.  If you come to them with such information, this firm will invest based on the statistics of success of that partner and firm!  Other investment firms on Wall Street use analytics in a similar manner.  The point being that review of your decisions in a more analytical manner may allow for fine-tuning. You may end with a superior decision.  That is your ultimate goal in the end.

Taffy Williams is the author of:  Think Agile:  How Smart Entrepreneurs Adapt in Order to Succeed to via Amazon