Decisions Over Decimals

CHAPTER 5Developing Intuition forNumbers

It is better to be roughly right than precisely wrong.

— John Maynard Keynes

An important question we're often asked about the Quantitative Intuition (QI)™ approach is whether you can actually learn intuition. It is clear that you can teach the Q in QI, but isn't intuition something you either have or don't have? Can you really learn to be intuitive about numbers? Quite simply, the answer is “yes,” you can develop intuition, and in this chapter, we show you how.

We first discuss how to resist the urge for certainty and the benefit in rough approximations. We then demonstrate how business leaders can learn numbers intuition by practicing the power of approximation. We show how to look at a number and, relatively quickly—by using available related figures or back‐of‐the‐envelope calculations—assess whether that number is likely to be within the ballpark of the true figure. Approximations allow decision‐makers to get a practical check on the numbers presented to them and better understand the drivers behind the figures. The habit of approximating translates into intuition. Rather than relying on complicated calculations that promise exact accuracy, you develop a feel for what seems about right. You also build the trust and confidence that underlie intuition.

In our work, we often observe that decision‐makers are swayed by statisticians and analysts to require universal, predefined high levels of accuracy. Of course, some decisions do ...