In Gone with the Wind, Rhett Butler famously says to Scarlett O’Hara, “Frankly, my dear, I don’t give a damn.” So often, when a senior executive makes a decision in contradiction to the recommendations she has received, or ignores the facts you have tirelessly organized to support them, the feeling must be similar to that felt by Ms. O’Hara. Bereft, abandoned, defeated, left behind.
Recently, I was stunned to learn how often decisions are made in disregard of the evidence. Gartner studied executive decision-making in 2015 and concluded that, through 2020, more than 95% of business leaders will continue to make decisions using intuition, instead of relying on probabilities based on the facts. The result, according to Gartner’s leading savant, Doug Laney, is that the related risks of a poor decision will be significantly underestimated. You can read more here.
But, is it really intuition or is something else going on? I submit it is something else. Every decision we make begins with a specific process by which we move from the beginning to the end. That process can have nearly infinite variations in the model we select for a specific decision. Choosing the correct pen is a decision entirely different than determining whether to execute a hostile takeover for $1.2 billion. But, in each instance, the decision begins with a commitment to a process.
That process is defined by rules that shape the steps to be taken, the stakeholders to be involved, and, in its most fundamental essence, the information to be gathered and analyzed. The information is the fuel for the decision itself. In the Trust Vocabulary introduced in my book, the body of information required by a decision is called decisional information. For each decision, the decisional information is necessary if the decision is to follow all of the rules.
But there is a second vital requirement: decisional information must, itself, be trusted to perform the role required by a decision process. No decision maker wants decisional information that cannot be trusted. If you think about it, much of any decision process is devoted to finding and validating the trustworthiness of the decisional information being acquired.
Therein is what makes “intuition” so misleading. I submit that those decisions are not actually made from the gut but, instead, they are being made out of necessity due to two kinds of fundamental failures, which can be collectively called decisional information risk.
First, there are decisions for which the information cannot be acquired to fill the placeholders defined by the rules for that decision process. Decisions are calculations. Just like mathematics, each rule describes what type of information is needed to replace the placeholder (A, X or Z) with a real value. But, imagine looking at an equation for which one or more of the placeholders are never replaced-it would be impossible to calculate the right solution. When that occurs in our decisions, when we do not have the information required, but a decision is still expected, we do just what we did on Algebra tests in middle school-we guess.
Second, there are decisions for which the information has been acquired, but whatever tests or procedures for validating its integrity and accuracy are, themselves, incomplete. For every unit of decisional information, we also have rules for whether that information can be relied upon for the decision that must be made. This is what judges and juries do—they assess whether the evidence should be considered factually accurate. We do the same in every decision we make, and even more so, when we are making business decisions.
In both instances-where information is not acquired or where information is not validated to be trustworthy-decisional information risk is the outcome. The decision, if made, is inherently vulnerable because the process rules, and their information requirements, have not been satisfied.
For the decision-maker, however, it can be humbling to confess a decision is not possible because the factual evidence required has not been collected or properly validated. Instead, someone stands a bit taller, puffs out their chest, and expresses a decision that is claimed to rest on their intuition. When challenged, often by those that report to them and have worked to collect the information, the decision maker responds as does Rhett Butler: “Frankly, my dear, I don’t give a damn.”
In my book, this is called the Rhett Butler Rule. Decisions that are made that are impaired by decisional information risk are not solid decisions. Why then do they persist? Why do nearly all executives claim to rely on their intuition, rather than embrace objective, trusted information as the foundation for their decisions?
Frankly, the critical missing process step is the requirement to validate the trustworthiness of decisional information. Regularly, decisions move ahead with a presumption that the information that has been collected is truthful and complete. But, when the stakes are high, then we see the missing process step be introduced. Perhaps it is the personal risk of making a major decision that backfires because of faulty information, but the decision makers will work harder to document their process and validate the trust placed in the information.
How can the instinct to rely on intuition (and, thereby, incur decisional information risk) be constrained? The strategy is simple: to demand the validation of the information be a conspicuous and transparent element of the process. That means that the question, “Can we trust the information on which this decision relys?” must be part of the analysis, rather than relying on a presumption of trust.
There is one further step to eliminating reliance on the Rhett Butler Rule: documenting the evaluation of the trustworthiness of the decisional information. It is entirely okay to create a record of what you know about where information came from, the trustworthiness of its sources, and the probabilities that the decision may be based on information that is less than 100% probability of being trusted. But what steps were taken to validate the provenance of the information? What alternative sources were considered? How was confidence established that the decision itself was grounded on trusted information versus intuition?
The worst possible outcome is to make a decision that goes badly which is then evaluated in hindsight (as all bad decisions will be tested). Time and again, those investigations reveal that the decision maker relied on decisional information without any independent validation having occurred. The decision maker may argue reliance on intuition but the proof will demonstrate that decisional information risk was ignored. The decision maker moved forward without following the rules for trusted information to be acquired and validated.
In my classes at Johns Hopkins and Oxford, the Rhett Butler Rule has emerged as a valued tool for assessing the integrity and quality of decisions. It is particularly important to evaluating decisions involving when to deploy, or refrain from deploying, information security controls and defenses. Hopefully, asking “Is the decision no better than Rhett Butler?” will be useful to you as well.