The art of decision-making may boil down to assessing your instincts

Editor’s note: Mal Mixon, former chairman of Invacare Corporation and a well-known entrepreneur, will regularly share his business advice and experience with Smart Business readers. Ask him a question at [email protected], and your inquiry could be the inspiration for his next column.

Q: When deciding on a business matter, did Mal ever proceed with his gut feeling rather than data? Do his experiences ever trump data?
A: When making investments, the gut feeling has to be there. If you are looking at investments, has anyone ever shown you projections that go down instead of up? No, they don’t. They all go up, and that is my point.
But if you don’t have a good gut feeling about the opportunity, if you don’t feel right about it, if you don’t sense there is an opportunity, it won’t work. Most of the time, if you have a good gut feeling, it will work out. But if you don’t have that, the opportunity rarely works out.
When I was running a business, I looked at data a lot when it comes to business decisions. The same principles apply. You should also have a good gut feeling about business decisions.

Q: What about someone starting out? Are you born with the ability to sense your gut feeling or can you develop it?
A: Well, I think it is a collection of life’s experiences. Like Warren Buffett says, “Never invest in a business you don’t understand.” I don’t like to invest in businesses I don’t understand, so I stick with basic businesses as opposed to software or computers. I’m not an expert in these areas. Most of the investments I have made have been in the likes of medical products, vacuum cleaners and banks.
When I was talking with physicians about developing a sterilization company — that has become Steris — my gut feeling was, ‘Hey, this is a good opportunity.’ It had nothing to do with looking at data or numbers. I just felt we could do it.
Steris is now a $1.9 billion global company with 8,000 employees focused on the health care, pharmaceutical and research markets. Steris is merging with Synergy Health plc, which will add even more to its value.
When I bought Invacare, the numbers made sense. My gut feeling told me I was ready to run this thing. We grew from $19 million to $1.8 billion.
Numbers are helpful, but if you don’t feel right about it, don’t do it. Even when everything seems right, you’re going to be wrong once in a while. Timing is important as well. Nobody had flown before the Wright brothers. But they believed; their gut feeling was that they could fly.
Sometimes you have to make a decision before you get the data. A lot of small companies can’t even publish the previous month’s results until a month later. They say, “Well, I’m not going to make any decisions about December until I get November’s data.”
Well, you don’t until the end of December so sometimes you have to make decisions without perfect data.