Many leaders rely on their intuition to solve difficult problems. Often they cannot explain how decisions are made. Where is this inner feeling born and when does it suggest the right decision to us?
Many senior executives admit that they often make important decisions without any logical analysis, relying only on intuition and foreboding, or "inner voice". However, they cannot explain how decisions are made.
What is the inner voice? We've spoken to many top executives who are known for their keen business sense, and none of them has been able to explain clearly why they make the most important decisions while rejecting logical analysis.
In an attempt to describe this incomprehensible feeling of self-righteousness (without knowing the clear reasons for the occurrence of such a feeling), they used the following expressions: "professional instinct", "intuition", "instinct", "inner voice" and "premonition", but the very process of acceptance solutions could not be described.
Recent research has revealed interesting findings. Our feelings and emotions are not only important for our intuitive ability to make the right decisions, but can be an integral part of the decision-making process.
Where is this inner feeling born and how does it work? When does it tell us the right decision, and when the wrong one? The explanation for this phenomenon may surprise you, or it may change your approach to decision making. However, first of all, you should find out why the inner feeling is so important.
Unknown factor
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Many years of studying the methods of work of managers have shown that they regularly solve complex problems, relying on their own intuition, if logical methods (for example, analysis of costs and benefits) do not work. It is common knowledge that the higher people climb the corporate ladder, the more they need a business sense. In other words, intuition is one of the factors that distinguish a mature husband from a young man.
Ralph S. Larsen, chairman and CEO of Johnson & Johnson, explains the difference: “It is not uncommon for line managers to do an excellent job of constantly making decisions. But when they turn into top managers and their tasks become more complex and larger, they often realize that they lack flair or intuition. And this is a really big problem."
It is compounded by the fact that many companies nowadays find themselves in very difficult conditions. The rapid development of new technologies forces business models to change almost daily, and the number of competitors continues to grow. “Sometimes there just isn't enough time to carefully consider options and alternatives, so you have to rely on your business sense,” Larsen says.
Obviously, gut instinct is better suited for some tasks (strategy and planning, marketing, public relations, human resources, research and development) than for others (manufacturing or financial management). However, any senior position requires great business sense. Why?
Larsen explains this with this example: “When I am presented with an offer to purchase, the numbers always look convincing. The ROI meets the requirements, the investment pays off, the growth rate is excellent. They list me all the reasons why this acquisition is simply necessary. But just at the moment when I have a huge amount of quantitative indicators already analyzed by smart people, I have to do what I get paid to do. Because, looking at these numbers, I will understand, or rather, feel whether this deal is good or not. After being CEO for 11 years, Larsen claims that experience has taught him to trust his intuition.
Consider the biological aspect of intuition.
What is "flair"?
First, your brain is non-stop processing information that you unconsciously perceive, not only during sleep, but also during wakefulness. This largely explains the "insights" that happen to you when you learn something that you actually already knew.
Henry Mintzberg, professor in the Department of Governance and Management at McGill University and a longtime supporter of intuitive decision-making, argues that the discovery of the obvious comes exactly when your consciousness receives information already known to your subconscious. To define these two different types of thinking, Mintzberg and others adopted the conventional terms left-brain thinking - for everything conscious, rational, and logical - and right-brain thinking - for everything subconscious, intuitive, and emotional.
In addition, our brain is in a complex way connected with other parts of our body through the nervous system and chemical methods of transmitting information (hormones, transmitters and modulators). Because of this, some neuroscientists argue that what we call "the mind" is actually a system of communication between the brain and body. This, in turn, helps explain why intuitive sensations are often accompanied by physical ones.
Why does the right hemisphere of the brain work so well in some people?
How important it is to be emotional
Scientists still find it difficult to answer this question, but recent studies have revealed some interesting facts. Antonio R. Damasio, a leading neuroscientist at the Iowa State University College of Medicine, has observed people who have suffered brain injuries, namely the frontal cortex, which is responsible for secondary emotions such as compassion-driven sadness (as opposed to basic emotions in particular, fear caused by the sight of a snake).
After such trauma, patients remain normal in many ways (speech, motor skills, attention, memory, mental ability), but they stop experiencing certain emotions. For example, when they are shown photographs of people severely injured in an accident, they are not affected.
During his research, Damasio began to notice something strange: such patients could hardly make the simplest decision. In his book Descartes' Error, Damasio describes in detail the case when he asked the patient to choose the day of the next visit (there were two options).
The patient took out his diary and began to ponder out loud the many pros and cons of each option, taking into account previous visits, the interval between them, the weather forecast for those two days, etc. After half an hour of these tedious (and at the same time extremely rational and logical) conclusions, Damasio himself appointed the day of the next visit.
This phenomenon allows Damasio to argue that decision making is not a purely rational, analytical process. On the contrary, our feelings and emotions are critical in helping us quickly filter out various options, even if our consciousness does not make this selection. Thus, our intuition brings the decision to the point where conscious thinking is able to make the right choice. Both an excess of emotions (for example, anger) and their absence can lead to the wrong decision.
Combination in combination
General intuition is one thing, but a business instinct that tells an experienced venture capitalist whether to take on a particular business is another. Herbert A. Cymon, a Nobel laureate professor of psychology and computer science at Carnegie Mellon University, studied decision making for decades and concluded that experience allows people to divide information into pieces that are easier to process and store in memory.
For example, Cymon found that grandmasters can distinguish and memorize about 50,000 combinations from an astronomical number of variations of the position of pieces on the board. It is also important to know the possible options for defense and attack, which change along with the change in the position of the figures.
The observations of experts in various fields have confirmed that professional flair is often a collection of certain combinations and rules. In fact, Robin M. Dawes, professor of social sciences at Carnegie Mellon University, has discovered a rather curious fact as a result of lengthy research: statistical models built on some rules are usually more effective than expert judgment. Dawes argues that models are more resilient, if only because they are not affected by a bad breakfast or an argument with a loved one.
Although business experts have rarely been the subject of study, several studies support Herbert Cymon's statement that "intuition and discernment are just analysis that has become a habit." In one experiment, statistical models that used different financial ratios (for example, the ratio of cash flow to total debt) more accurately predicted the success of the borrower's business than the bank's lending staff.
In another study, the statistical model yielded the same results as two types of retailers: professional buyers who predict catalog sales of fashion clothing and brand managers who predict coupon redemption rates.
According to Cymon, using our gut, we apply rules and combinations that we cannot reasonably explain. Saymon states: “We constantly draw conclusions based on what is happening in our system of perception. Although we understand the result of our perception, we cannot explain how it works. He argues that intuition is nothing more than these hitherto incomprehensible principles of the work of perception.
He also believes that any, even the most difficult process, for example the president's decision to acquire a company, can be broken down into certain combinations and rules. "Since the early 1970s, we have worked with various experts and found that, unlike the average person, the expert has an entire encyclopedia in his head, the reference to which is the ability to recognize combinations."
Find out and test yourself
Yet executives recognize that gut instinct can lead to error. The fact is that some features of human nature can push us to the wrong decision. For example, we often take unnecessary risks to recoup losses - the classic gambler syndrome. Another pitfall is that we tend to see combinations where there are none (statisticians call this "overdoing data matching").
This is compounded by several factors that prevent us from admitting that intuition often pushes us to do wrong things. The first factor is a tendency towards revisionism: we remember how we did not listen to the inner voice when it was worth doing, but we easily forget how lucky we were that we did not do it in another situation.
In addition, there is such a phenomenon as "self-fulfilling prophecy." When we hire a person or offer them a promotion, we consciously or unknowingly make additional efforts to ensure that that person succeeds. We do this in order to justify our decision, but we do not think about how correct it was.
Another dangerous factor is arrogance. Various studies have revealed that we tend to overestimate our capabilities in various areas - the ability to drive a car, tell funny jokes, distinguish between European and American handwriting, etc. Take, for example, our ability to sense lies.
Paul Ekman, professor of psychology at the University of California, San Francisco, found that we recognize lies much worse than we think: most of us can tell if the other person is lying only half the time. The main problem, Ekman says, is that many of us will never know if we have correctly assessed the truthfulness of the interlocutor without feedback. If we do not know that we were mistaken, then we will not be able to draw the appropriate conclusions and will be blissfully unaware of our true abilities.
To avoid these pitfalls, many top executives create powerful self-control systems. “I’m always aware of my decisions, and it’s even more about bad decisions than good ones,” says Larsen Abdu, CEO of the Wisconsin Energy Corporation, specifically allocates eight hours a week for walking, workshop work and travel. on his Harley-Davidson motorcycle.
He says: “During these sessions, I refresh my memory of past decisions. In doing so, I draw conclusions that will help me when I face similar situations in the future. This self-esteem is essential in the decision-making process.
Precisely because self-esteem and feedback are essential to making the right intuitive decision, some organizations have made these things part of their corporate governance culture. When faced with a difficult decision, top managers of companies usually ask the opinion of others.
Larsen says: "When I'm not sure what decision should be made regarding a new product or major administrative changes, I often seek advice from people I trust, but who have not previously participated in the discussion." This helps to find out the reason for the manager's uncertainty in his decision. "And suddenly everything falls into place."
Perhaps the greatest benefit of intuitive decision-making, combined with feedback, is that management can use it quickly when needed. “Most likely, more than half of my decisions are wrong,” he says, “but if I need to make a decision quickly and I make a wrong decision, then I can just as quickly change it to another. Thus, over time, I will have more correct decisions than wrong ones."
Posted by Amitai Etsioni, professor at the Ford Foundation at Harvard Business School, president of the American Sociological Association, and faculty member at George Washington University. The material is published in an abridged and adapted translation from English.
