Is there knowledge which by its nature cannot be expressed in propositions and is yet trustworthy?
That knowledge is called Intuition.
According to a report published by PwC, business leaders are taking a majority (41%) of their strategic decisions about the future of their businesses based on their gut (or Intuition).
So, let no one kid you.
Intuition is beyond logic, but it is not mystical (despite what psychics, some philosophers, and gurus will tell you). See a related post of mine on the nature of intuition, here.
Intuition is a valid and superior (in a particular part, as you will see below) form of knowledge. That is why business leaders (see a few quotes below) rely on it!
Intuition is a very powerful thing, more powerful than intellect, in my opinion. That’s had a big impact on my work.
Ralph Larsen, former chair and CEO of Johnson & Johnson:
Very often, people will do a brilliant job through the middle management levels, where it’s very heavily quantitative in terms of the decision making. But then they reach senior management, where the problems get more complex and ambiguous, and we discover that their judgment or intuition is not what it should be. And when that happens, it’s a problem; it’s a big problem…
I’ve trusted the still, small voice of intuition my entire life. And the only time I’ve made mistakes is when I didn’t listen.
Daniel Kahnemann in his book (Thinking fast and slow) distinguishes between 2 different types of thinking: System 1 and System 2. According to him, Logic caters to system 2 thinking, and Intuition caters to system 1 thinking.
When to use which system, is the subject of this post.
The answer is simple: For Analysis, use logic. For Synthesis use intuition.
This has been mentioned already by several famous and respected people:
Bruce Henderson, BCG’s founder:
The initial and final choices in Business are always intuitive!
Reed Hastings, Netflix’s CEO:
We start with the data. But the final call is always gut. It’s informed intuition.
S Radhakrishnan (India’s 2nd President and a Philosopher):
Intellect finds it easy to distinguish and separate, but when it synthesizes it is artificial in its methods and results. It gives us a patchwork and not a harmony.
Now, please do not take this last quote to be a mystical one!
Howard Schultz took the decision to close all Starbucks stores he decided intuitively. He felt that the place had lost its soul. A rational analysis will often not yield this kind of feeling-oriented conclusion, as he mentions in his book (Onward):
I sat back in my chair. It would be a powerful statement, but no retailer had ever done such a thing. “That’s a big idea,” I replied, considering the risks. Starbucks would lose several million dollars in sales and labor costs. That would be unavoidable. Competitors would capitalize on our absence and try to lure away our customers. Critics would gloat, cynics would smirk, and the always-unpredictable media scrutiny could be humiliating. On Wall Street, our stock could sink even lower. Most dangerous of all, such a massive retraining event would be perceived as our own admission that Starbucks was no longer good enough. But if I was honest with myself, I knew that that was the truth. I pursed my lips and looked at the team. “Let’s do it.”
In an interview to inc.com, Howard says:
With so many competing voices, I learned to trust my own intuitive sense.
If you want to know more, please read my blog post about Howard’s gutsy decision here.
Analyze a business well. Break the problem down into components and go deeper into the key areas.
Generate so-whats and implications from your analysis.
But, take the final decision (i.e. the synthesis) based on Intuition.
The right synthesis (or conclusion) will simply ‘feel’ right.
Provided you are experienced, passionate, and unbiased! By the way, all these 3 qualities are achievable by effort…
While doing Analysis, use Logic. While generating the final recommendation (or Synthesis), use Intuition.