S1: EP24 Peeling the layers

Episode Transcript

Vaishali Nikhade 0:03

Hello, hello, hello, everybody. This is Vaishali and today's episode is about peeling the layers. So welcome back. And we are going to look at the difference in making a decision that is convenient or more ruled by logic, as opposed to making a decision that is perhaps a little bit inconvenient and more ruled by intuition.

So the first point is that logical decisions are very easy to make. They have a premise based on past history and past results. And the inherent assumption in making a logical decision is that nothing is going to disrupt this premise, or these premises rather, from playing out in the future.

This is also the inherent risk in a logical decision, which means that the assumption that you're making can turn out to be a risk because if the assumption is not valid, then everything falls apart. So essentially, when you make a decision like that you're kind of gambling on the assumption or hoping that the assumption is going to be true for whatever length, your decision is going to be valid.

So let's take an example of John and Jane who work at company x. And both of them work at the same company. And both of them commute to work. And they want to buy a house. And John feels that they should buy a house closer to work so that they can avoid the commute. And Jane feels that it doesn't matter for whatever reason that they should buy the house they like which is a little bit further out.

So you see logic playing in one person's decision and intuition playing in the other person's decision. So because John wants to buy the house that is closer to work, he is assuming that they are going to keep working at the same place number one. Number two is they're going to keep commuting all the time. Because that assumption has been valid for a long, long time.

And the third point is that the house closer to work is expensive, because everyone wants to live in that area for whatever reason. So maybe they spent $100,000 more if they have to buy a house closer to work. So Jane thinks that they would be alright, even if they don't buy the house closer to work.

But she cannot justify her decision, which is a characteristic of intuition that at the time you are making the decision, you cannot justify the decision in terms of a logical argument. Because John has a logical argument that the commute is going to be shorter, and they are going to save time.

And for whatever reason Jane doesn't feel that it's the right decision. But she cannot put up an argument against it. Because she does not have any evidence to present as to why she feels that they would be alright buying the house further away. So the long story short is that COVID hits around March of 2020. And they no longer have to go to work.

So essentially, what happens is that Jane's, gut feelings or her intuitive decision making abilities actually turned out to be right, that she felt that things were going to be alright even if they did not buy the house closer to work. And if you go with John's decision, essentially what it means is that they ended up spending $100,000 more buying a house closer to work and then the work is no longer a condition in their decision because they are essentially working from home.

So intuitively, they would have kind of just felt that you know, it would have been better to go with the gut or go with Jane's decision. However, logically, she could not justify or tell as to why the commute was not going to be an issue. So that is the first point. The second point is logical decisions aim at the outcome.

So whenever you make a logical decision, you're most of the time going for the goal or going for the outcome. Whereas whenever you make an intuitive decision, you knock out more goals as you navigate towards your main goal. What does that mean? It means that in the process of going from where you are to going towards your final goal, you will also accomplish a lot of other, let's say minor goals or some other goals that you had, along with your major goal.

And the easiest example of this would be to look at bowling. So think about aiming the bowling ball at the pin, which is in the center. And when you aim the ball at the center pin, you are knocking out not only the center pin, but you're knocking out a lot of other pins along with it. So this is what intuitive decision making does. Not only does it knock off your major goal, but it knocks off a lot of other goals, along with your major goal. So you achieve a lot more than what you had in mind when you make a decision based on intuition, rather than just going for the logical outcome.

The third point is that logical decisions require justification. Which means that you constantly keep processing about why you have to make the decision and you constantly keep justifying to yourself, about having to make that decision. And the easiest example would be to go back to the first example of John and Jane wanting to buy a house. And every time they have to buy the house closer to work, or they get into a discussion about buying the house.

Their justification or John's justification is that it is going to save them commute time. Jane, on the other hand, is making an intuitive decision. And she feels that for whatever reason, it doesn't matter. It just feels more right to buy the house which is further away. So intuitive decisions feel right when you make them. And you may not have as much justification as to why you're making them.

Or you may not able to counteract the logical arguments for the decision. However, when you make a decision based on intuition, you are willing to wait it out and see how it's going to play out in the future. So in the case of the house, if we go with Jane's gut feeling or gut decision that she is okay, buying the house further away, they would have essentially won in the sense that they wouldn't have spent the 100 grand more to buy the house. So intuitive decision feels right when you make it without having a justification for it.

So I am just going to summarize the three points one more time. The first one is that logical decisions are easy to make because they are based on a premise of past history, past results and an assumption that nothing is going to disrupt these premises from playing out in the future. This is also the inherent risk in making a logical decision.

The second point is that logical decisions aim at the outcome and intuitive decisions, you achieve a lot more than the outcome when you go for them. And then the third one is that logical decisions require justification.

And intuitive decisions on the other hand, they just feel right when you make them and you may not be able to justify the exact logic in terms of why you're making the decision, except that it just feels right. So I hope that you enjoyed this episode and these points and if you have any comments I would love to hear from you.

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