Category Archives: Decision Making

Taking Stock of Today’s Business World

Screen Shot 2015-05-16 at 10.44.13 PMThe best business leaders want to innovate, embrace change, and create new business approaches because they recognize the need to evolve.  And yet in business too many leaders still do things by the book and stick to the logic of reason and results to the exclusion of other ways of thinking.  Too many of us think and operate primarily this way, especially during difficult times.  The uncomfortable reality is that disruptive ideas come from the combination of instinct and play, so we’re pretty much thinking backward when it comes to engaging innovation.  We’re rearranging our companies rather than exploring the many ways we could create a completely different kind of company.  Organization has the potential to add the most value when it follows creative imagination possibilities, no when it precedes it.

Popular thought says that by applying more analysis, focusing more on results, and working harder to get those results, we will get to the new and different.  But that is not the case.   This is a forceful approach to change, but it’s not actually a smart approach to change.  It’s certainly not a very creative approach to change. Given this way to thinking, however it’s no wonder that we’ve developed business models that are hard to sustain.  The fragrance industry, the car industry, and the media industry, for example, have all been predominantly operating in the same way for many years, still try to innovate with reason to get results, and still hoping that if they use the same business models and the same management models they will be able to capture the market, keep sales afloat, and maintain margins.  But that is not in the cards.  In fact, the odds have been against it all along.

On an even larger scale, it’s no wonder that we’ve developed economic models that are not sustainable and that contribute to dwindling resources, climate change, and pollution.  The way we’ve been thinking about development has been through the linear, rational management systems.  But life unfolds according to very different principles.  Most likely, if we haven’t integrated the fundamentals of play, intuition, and instinct into our development models, it’s because we haven’t conceived of them in the first place.  Yet they present a huge opportunity.

It’s clear that we have evolved, progressed, grown, and prospered through a model that largely excludes the fundamentals of our ecosystem.  But we’ve reached a place where the disconnect is so big that we have no choice but to think differently–really differently–and innovate radically. Play, intuition and instinct show us how to do just that.  They show how we can think in a way that includes the fundamentals of life, the randomness of play, and the power and adaptive nature of our instinct for survival while responsibly harnessing our propensity for aggression and leveraging our valuable scientific heritage and its instrumental tool called logic.  And if we’re able to do that, then we’ll be able to innovate and change more easily.  We’ll also be able to prosper in a way that is more balanced between cooperation and competition, without compromising our ecosystems, our survival, and our legacy for future generations.

Excerpted from The Intuitive Compass, Jossey-Bass, 2011. 

The Science Behind Gut Feelings

Screen Shot 2015-03-29 at 8.50.35 PMBecause our instinct is responsible for our survival, it actually makes complete sense for it to be heavily involved in sophisticated decisions.  It has been doing that job for thousands of years.  So it follows that, in important matters that will affect our lives, our instinct should be the first and foremost judge of whether or not a decision is good.  A study conducted by neuroscientists at Princeton University confirms this fact.  The aim of the study was to demonstrate how a gut feeling may rise before a person becomes conscious of what the brain has registered.  In the study, students were

 directed to pick out figures—people or cars—in a series of photos that flashed by on a computer screen.  The pictures flashed by four at a time, and the participants were told to scan only two of them, either those above and below the center point, or those to the left and right.  Eye tracking confirmed that they did just that.  But brain scans showed that the students’ brains registered the presence of people or cars even when the figures appeared in photos that they were not paying attention to….  The brain tallies cues, big and small, consciously and not, it may send out an alarm before a person fully understands why.

 A gut feeling is often the result of some part of our brain taking in and processing information that we are not conscious of having taken in and processed.  This study demonstrates how we sometimes are now consciously aware of all of the information that we in face have already registered at some level—in this case visually.

When a gut feeling arises before a person becomes conscious of it, it can enrich their ability to make a decision.  Not only that, but sometimes logical problem solving is simply not the best option.  Sometimes the best way to come up with an appropriate answer to a logical problem is to base it on a gut feeling.  Dr. Gerd Gigerenzer, a psychologist who has studied the limits of rational thinking in decision making explains that, contrary to popular wisdom, sometimes there is no optimal strategy attainable to solve a problem.  He gives the example of a presidential candidate who has to plan a fifty-city tour.  The candidate would like to start and end in the same city and obviously cover the shortest distance.  The candidate would like to start and end in the same city and obviously cover the shortest distance.  There are so many possible itineraries that not even the fastest computer can optimize the candidate’s choice in a lifetime, a century, or even a millennium.

When optimization is out of reach we must rely on our gut feelings instead of logical deduction.  And this applies to any situation in which rules are not completely explicit, uncertainty is prevalent, or rule breaking is an option.  This obviously pertains to winning a negotiation, leading an organization, marketing a new product, investing in the stock market, or training executives.  Of course, for every one of these endeavors good enough strategies exist, but for us to find and choose these valid strategies we need to resort to what Gigerenzer calls a “rule of thumb,” which he defines as the product of a mental process that tries to identify the most important information and ignore the rest, taking advantage of an evolved capacity of the brain to do so.  For Gigerenzer, expert of the intelligence of the unconscious, “it would be erroneous to assume to intelligence is necessarily conscious and deliberate.” He adds, “We know more than we can tell.”

Excerpted from The Intuitive Compass, Jossey-Bass, 2011.

When Can I Trust Gut Feelings?

Screen Shot 2015-03-15 at 10.27.16 PMGut feelings about potential threats and opportunities are not always correct, and neuroscientists debate the conditions under which the feelings precede the conscious awareness of the clues themselves. But our instinctual skills evolved to ensure our survival, and research findings suggest that in some people those skills are exquisitely sensitive. So although the many serious researchers who say thatgut feelings are not always correct do have a point, they may be missing the most important point: gut feelings have other functions that transcend the logic of reason, and to leverage their role fully we should not evaluate gut feelings on a narrow basis of whether they are right or wrong.

When we engage in solving a problem using logical skills, we follow certain rules or protocols based on past experience with a similar problem. The rules and protocols we follow are generally well defined and measurable. If we succeed in solving our problem, we typically attribute it to the efficacy of the protocols we followed. If we fail at solving our problem, we can look back and analyze the steps we took to find where our approach failed.

Conversely, when we engage in solving a problem using our instincts, we follow a path that is highly specific to our problem and ourselves at a particular moment in time. If someone asks us how we solved the problem, we may be able to recount what we did, but even a detailed recounting of what we did will not necessarily apply to a similar problem. And that’s fine, because instinctual problem solving isn’t necessarily about replication; it’s about dynamic adaptation to circumstances. The problem is that when we are successful, we (and others) may attribute our success simply to luck, even though calling on our instincts is a skill we can develop. So although we may never be able to measure the efficacy of instinct-based problem solving precisely, that doesn’t mean it is a random phenomenon. The difference between logic-based problem solving and instinct-based problem isn’t necessarily efficacy; the difference lies in our ability or inability to precisely identify cause and effect. And when we can’t identify cause and effect, we feel out of control or inefficient.

Excerpted from The Intuitive Compass, Jossey-Bass, 2011.

Dealing with Chaos and Uncertainty

In my seminars at L’Oréal, SAP, and other companies, I often recount Edgar Allan Poe’s “A Descent into the Maelstrom,” a story that beautifully illustrates this aspect of chaos theory. It describes how three brothers go out on their fishing boat only to be caught in “the most terrible hurricane that ever came out of the heavens.” The storm drives their boat into a powerful whirlpool, the maelstrom of the title. One brother is thrown over board into the whirlpool and quickly carried under. Another brother goes mad with terror. But the third brother is suddenly struck by the awesome beauty of the maelstrom. With an inner calm he notices that some objects are being spun around at the top of the whirlpool rather than sucked into it. Unable to convey this to his mad brother, he submits himself to the sea, cling onto a barrel, and rides the maelstrom until it subsides and he is rescued. In the meantime the mad brother, because he fights the chaos rather than submitting to it, drowns when their boat spirals down to the depths. Although the experience turns the surviving brother’s hair white and makes him look older that his age, it give him a deep insight into the working of nature, and an enduring serenity.
I always remind participants that Poe’s story shows that the way each one of us chooses to handle confusion and chaos may have a huge impact on the final outcome for everybody. Each brother acted his own way and by doing so chose his own final outcome. In Poe’s story, when the third brother decides, in spite of his fear, to give up the fight with the maelstrom, he actually facilitates the organizing principle creates all the marvels that have evolved in nature. In our minds, it brings reason, feeling, and instinct into balance, if only we have the wisdom to trust it and stop trying to override it.
Excerpted from The Intuitive Compass, Jossey-Bass, 2011.

Obama’s Leadership: The New Way of Leadership?

We have all read criticism of President Obama leadership style: too indecisive, seeking consensus for too long, not able to make strong powerful decisions quickly.

I disagree with this. Our President has taken relentlessly hard tasks at heart—2009 bail-out—and made swift decisions—BP oil crisis in the Mexican Gulf. I will argue that he offers a new leadership style that deserves our attentive consideration as the modern way of leading.
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