Governance helps leaders make better decisions by clarifying things like vision, priorities, risks, decision rights, decision structures and so on. I have witnessed many times improvements in productivity and savings in the millions of US dollars after improving an organization's governance. However, I do feel that there is a place for intuitive decision making in the business world. In fact, the clarity and alignment achieved through formal governance, actually sets the groundwork for "safer" intuitive decision making.
I read this morning a great article on this topic in the London Times online. The article is by Professor Eugene Sadler-Smith, author of the upcoming book "Inside Intuition." Enjoy!
From The Times
August 13, 2007
When you just know. . .
We all have intuition – a gut feeling, a hunch or sometimes business instinct. It is a hallmark of how human beings think and behave. Though we are often exhorted to be cool and rational, to rely on hard data and logic, it is impossible to function without gut feelings when making decisions. Intuition presents itself to us in an instant, quite unbidden – a neurological alarm bell, if you like – and its effects can be life-changing.
If we can distinguish this intuitive feeling from fears, biases or wishful thinking it can be a potent, sometimes life-saving, force. A small child has a high temperature: nothing unusual about that. But a parent may have a gut feeling, take action – and discover meningitis, just in time.
It is also very relevant in the world of business. From research in the UK and the US, we know that 90 per cent of managers use intuition, in areas such as hiring and firing, new product development and business strategy; with two thirds saying that intuition led to better decisions.
There are many famous examples of commercial intuition. Sir Richard Branson claims in his autobiography that he makes up his mind about people and business proposals, and whether they excite him or not, within 30 seconds (not always effectively: witness Virgin Cola), and for entrepreneurs in the long run intuition seems to pay dividends.
Ray Kroc, the founder of the McDonald’s chain, has said that he followed his funny-bone instinct when deciding to borrow $2.7 million in 1960, against his lawyer’s advice, to buy out the fast-food franchise that he had started.
However, what my own research has proven, is that the unpremeditated, effortless spark of creativity does not arrive in an unprepared mind. It is the outcome of extensive learning and experience – a precondition for accurate intuition.
The capability to intuit occupies the threshold between our thoughts and feelings. Modern brain-imaging techniques such as MRI, allied to emerging insights from cognitive neuroscience, are beginning to identify specific brain regions that are implicated in intuitive judgment – so we are beginning to understand where in the brain it happens. Patients with damage to the part of the brain’s frontal lobe called the ventro-medial prefrontal cortex, which integrates feelings into decision-making, become quite unable to make effective decisions.
Modern cognitive science provides compelling evidence that most thought is unconscious, governed by mental processes that are inaccessible to conscious awareness: linguist George Lakoff and philosophy professor Mark Johnson describe conscious thought as the tip of an enormous iceberg, with 95 per cent of our thinking being unconscious thought.
Intuition, underscored by insight and intelligence, is at the crossroads of thinking and feeling. It has been described as a coalescence of ancestral instincts and adaptive behaviours. Intuitions are not the same as basic instincts, which are biological reflexive “knee-jerk” reactions.
Novices in fields such as medicine cannot exercise informed intuition, because they do not have the knowledge to fall back on. Experienced doctors tend to respond to clinical judgments based on previous experiences they have encountered with patients in the past.
However, these “grooves” in our thinking etched by past experience cannot be followed blindly, in medical matters or business. Spontaneous intuitions have to be subjected to correction, confirmation and revision.
For example, an experienced fire-fighting team leader will be able to detect a change in a routine blaze, to know intuitively when a floor might collapse. They could recognise patterns, and instantly perceive any changes and be alert to the gut feeling their unconscious mind “posts” into conscious awareness.
The engine room of informed intuition is expertise: and “intuitive muscle power” is vital in influencing judgment in life-or-death situations. So intuition is at its best when based on expertise and used in complex, dynamic and uncertain situations – such as a totally new product or service. In business, it would be crazy to use it in complex accountancy matters – although an experienced accountant can get from a quick glance at a balance sheet a sense of whether it feels right. Informed intuition is, in the words of Herbert Simon, a Nobel laureate, “analysis frozen into habit”, but this is not enough – they are charged (positively or negatively) with feelings. Intuitive judgments have to be married to analysis for effective decision-making.
Recent research suggests, paradoxically, that more complex judgments (such as choosing a place to live, or a flatmate) can, provided we don’t let thinking get in the way, be left to unconscious mental processes, with long-term happy results.
Can we develop our intuition to make better use of our gut feelings?
Yes, in a number of ways. We can build up the intuitive “muscle power” through practice. Intense, deliberate and focused “workouts” (such as the practice that a virtuoso musician puts in) with expert guidance on hand.
Successful decision-makers blend informed intuition with rational analysis and are able to switch cognitive (mental) gears from intuition to analysis and vice versa, deftly and adroitly. Senior executives are more likely to use intuition than middle and lower-level managers, for example – in fact, use of intuition is one factor that distinguishes expert practitioners from novices.
Contrary to popular belief, developing informed intuitive judgment through intense practice is part of the acquisition of one’s professional expertise. (Stereotypically, we think women, both inside and outside the workplace, are more intuitive than men. Research is mixed on this. Women might be more intuitive socially, but this is as likely to be because of upbringing, where girls are expected to be more socially sensitive than boys, as purely down to hard wiring.)
Besides practice, there are other ways you can discern whether to trust your gut. Seeking feedback on your intuition is essential; you might not know that you are consistently making bad intuitive decisions. Ask your subordinates, or peers, whether they think the decisions you are making are the right ones. If not, you need to learn to listen to those around you, and watch how other experts do it, and start to take tentative steps again.
Learning to quieten the incessant “voice in the head” that we all have is also important. Our rational mind is constantly talking to us, and it can drown our intuitive feelings. By noticing its presence, you can learn to distinguish it from your gut.
A good way to differentiate between the two is to take a two-minute walk around the block, or step outside and take a few deep breaths.
It is no coincidence, perhaps, that the word intuition comes from the Latin intueri – meaning to look inside, or to contemplate. Take the time to do this, and your gut will make its presence felt.
Those special moments
— Johnny Depp said it was love at first sight when he met his long-term partner Vanessa Paradis for the first time: “You have this feeling – I can’t really explain what it was, but I had it when I met Vanessa. I saw her across a room and I thought: ‘What’s happening to me?’ I had no way of knowing how great a person she was.”
— The most famous case of intuition in action in the world of sport occurred in the 1950 Monaco Grand Prix, when the great Argentinian driver Juan Fangio braked in the second lap – avoiding a serious accident out of sight around the next bend.
— Howard Schultz described physically shaking when he came up with the idea for Starbucks: “Like deciding to jump off the side of a building with no net.”
— Stravinsky said of Le Sacre du Printemps (The Rite of Spring): “I had a fleeting vision which came to me as a complete surprise. I had only my ear to help me. I ‘heard’ and wrote what I heard.”
— Jonas Salk discovered the polio vaccine after spotting an incongruity in a medical lecture at college. “The light went on at that point,” he said. “Intuition tells the thinking mind where to look next.”