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You stand backward with your toes clinging to the edge of the slippery cliff, and then you "decide" to jump backward. You free-fall for the first few moments and rappel down the side of the cliff while splashing through the waterfalls.

The word "decide" is such an interesting term to me lately. When I think back to the surging flood of thoughts, the combating notions, the intensity of my internal deliberation, it made me realize that the psychology behind decision making is incredibly fascinating and somewhat mysterious.

Probabilities and statistical methods--hundreds before have jumped and some are now waving back at me. Mental simulation--I see my feet flatly hitting the cliff wall, I see myself gracefully bouncing back and landing softly on the ground. Experience--others I trust have done this and survived. And lastly, intuition--what did my gut say?Quick scan, everything felt okay.I jumped.

Intuition is too often dismissed. Maybe the paranormal flavor intimidates. Seems frivolous to give gut feel due consideration in a world that encourages the relentless gathering of information before making a decision. Yet consider when we meet someone for the first time. Within seconds we make a conclusion whether we like them or not.In reality, we tend to disregard this, snap judgments are considered rude and contravene basic social paradigms.

"Blink: The Power of Thinking Without Thinking" by Malcolm Gladwell, author of "The Tipping Point" is a book that explores this very concept--the power of making split second decisions or in other words using intuition. He calls it "rapid cognition" and it happens in a blink.

The book recounts numerous stories specifically one of a Cleveland firefighting team that responded to a routine kitchen fire. They entered, started dousing the fire then suddenly the lieutenant felt something was wrong and he immediately ordered everyone to evacuate. Moments later, the floor collapsed.

Much later, it was discovered that the fire was in the basement and not the kitchen as originally thought. The fire chief acted on rapidly synthesized unconscious information such as the fire's abnormal characteristics. This split-second recognition saved lives.

Author, Gary Klein, takes this notion a step further with "The Power of Intuition: How to Use Your Gut Feelings to Make Better Decisions at Work." The book demystifies the role of intuition in corporate decision making. He maintains that intuition is not a sixth sense but a learnable and essential skill required in organizations. Klein states that 90 percent of the critical decisions are based on gut feel.

Does intuition play a part within our risk management decision process? Absolutely. If you doubt this, just ask your underwriters next time whether gut comes into play when deciding to take on your risk. Or simply read the required key competencies listed in an underwriter's job description: "Analytical, synthesizes complex or diverse information, and uses experience and intuition to complement data."

JOANNA MAKOMASKI, the former risk manager for a global energy company, is a leading specialist in innovative Enterprise Risk Management methods and implementation techniques for ERM Quickstart. She writes on risk management.

October 15, 2008

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