A Heuristic - should we risk it?



If we've heard of the word "Eureka" (often with a "!") we've also heard of heuristics. They both come from a Greek verb "to find". A heuristic is a mental technique for seeking a solution using experience, intuition and informal calculations - but why is it/are they interesting in business?

The answer is that they're a very useful short cut or "rule of thumb" for problem solving and decision making. Take the example of a busy doctor who sees a patient every few minutes. He or she listens to symptoms and then makes a decision, based on accumulated knowledge: "I've seen this before, and...." The decision covers diagnosis of the patient's condition, followed by the best choice of treatment. This approach, which filters a potentially huge number of scenarios, is clearly a much more practical alternative to ordering time consuming tests, simply to eliminate other possibilities - unless of course the doctor suspects a more complex condition. In short, it uses acquired skills to focus on solutions, and even if not always perfect, it's very effective and applies finite resources wisely.

The general risk is that the use of heuristics might overlook precisely those occasional more difficult situations. Such a degree of risk is perhaps unavoidable in reality and will hopefully be either small or capable of remedy.

On the other hand, there are some quite specific risks associated with heuristics that, if recognised, can be somewhat reduced at source. These can be seen as psychological biases and go under such headings as Anchoring, Availability, Familiarity and Representativeness: these and more can be easily found on the Internet.

To answer the question in the title: we often have no alternative to heuristics, unless very specific conditions exist (e.g. the seriousness of potential error and the availability of resources to provide additional data and analysis). It's worth knowing more about them and also practising to maximise the good and minimise the not so good.








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