Woman considers options of a business decision Learning to trust your instincts can be a valuable tool in leading your business. First, you have to know if your gut is good — and then know when to go with it. — Getty Images/fizkes

Trusting your instincts can be invaluable in business, especially when information is scant, time is short or you’re contemplating a big, bold or new idea. But research finds that in general, humans aren't great at judging their own intuitive skills, so it's vital to evaluate whether you’re any good at going with your gut.

Think of intuition as the soft-tissue emotions that bind the analytical bones in a body of decision-making information. And don’t underestimate emotions.

“Emotions are actually not dumb responses that always need to be ignored or even corrected by rational faculties,” wrote Valerie van Mulukom, psychology researcher at Coventry University in the UK. “They are appraisals of what you have just experienced or thought of — in this sense, they are also a form of information processing.”

Though difficult to measure and study, research has suggested a sixth sense can be useful in part because it’s based on information we take in subconsciously — our brains ruminate on actual facts more than we realize. Other studies have found the best decisions are rarely based on pure gut or solely on analytics, but rather on a combination of the two.

“I believe in intuition and inspiration,” Einstein once told a friend. “At times I feel certain I am right while not knowing the reason.”

When to trust your gut

Think of intuition as a tool. It can serve as a giant sledgehammer to come down decisively when you tire of chiseling away at a problem, or a handy pair of pliers when you can’t find a proper wrench to turn an opportunity on, or off, right now.

“Making a decision with our gut is necessary when we don’t have data that could be used to make a decision, or when we don’t have enough time to collect data or to do the research that might help us make a data-driven decision,” said entrepreneur and business consultant Mark Graban, author of “Measures of Success: React Less, Lead Better, Improve More.”

This can be particularly true when the decision involves people. “If we’re deciding between two vendors and they seem equal, our gut might help us make the final decision about what just feels right or what feels more comfortable or correct,” Graban told CO—.

When the stakes are highest, gut instinct becomes most vital.

Sure, small business owners might not have access to extensive research and countless topical experts like some big company CEO, Graban acknowledged. But consider the advantages to a stricter info diet:

“If anything, small business owners are probably more free to make decisions based on intuition, and that can be more nimble and (possibly) more effective,” Graban said. “In a flood of information, when it would take too much time to sort [it all] out, we might need to go with our gut.”

Several studies led by Laura Huang, an associate professor of business administration at Harvard Business School, have found that the value of intuition rises with uncertainty and risk. When the stakes are highest, gut instinct becomes most vital.

“In the face of information overload, mounting risks, uncertainty and intense pressures to make the right decisions, there is often debilitating evidence that delays our decision making,” Huang wrote in the Harvard Business Review. “We put the choice off, rather than deciding. Trusting your gut allows leaders the freedom to move forward.”

[Read more: 5 Processes to Help You Tackle Tough Business Decisions]

How to know if your instincts are good

People who think they have great intuition tend not to be any better at it than those who don’t trust their gut, according to one study. So how can you know if you’ve got the stomach for it?

First, consider your expertise, and areas where you lack it, and acknowledge when you might be wise to trust the judgement of others. Just as the soft tissue of muscles and tendons need good bones to make a strong body, intuition relies on solid domain knowledge — all that expertise in the back of your mind — to generate smart conclusions.

Intuition is not guesswork.

In fact, and with a dash of irony, Graban suggests getting all analytical about your gut decisions.

“Making a decision based on our gut is a prediction — and we should evaluate our predictions, assumptions and hypotheses to see how they play out,” Graban said. “We can gauge or calculate our intuition batting average — should we trust our gut or, for example, rely on the intuition of a business partner or our spouse?”

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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Published March 17, 2021