Category Archives: Executive Education

How Instinct and Intuition Can Help You Navigate Our Uncertain Times

No, no! You’re not thinking, you’re just being logical.

–Niels Bohr, Nobel Prize winner in physics

photo-1424298397478-4bd87a6a0f0cTo date, our collective approach to human intelligence often relies on outdated concepts. The misplaced expectations we place on the ability of instinct and intuition to guide us in life often obliterates their original contributions. We expect intuition and instinct to give us black and white answers that logic can evaluate. It is simply not their function. Yet this misunderstanding of intuition and instinct, which is evident in questions like, “Can I trust my intuition to make the right decision?” or “Can I rely on my guts to do this?” is often encountered in business. This in turn limits our ability to better understand the breadth and depth of a situation and make decisions with a broader perspective, which is exactly what instinct and intuition are meant allow us to do.

It is necessary to better understand how our brain functions in order to better leverage its creative capacity for in-depth reflection, original thinking, and efficient and sustainable decision making.  But with the exception of rare initiatives, business schools and educational institutions in general seem quite resistant to change in this field of interest. Our economy is highly complex and unpredictable.  This makes traditional decision making, which is predominantly guided by the laws of logic, inoperative or plain dangerous. Therefore we need to better understand our mental life–and its larger potential, which is hidden to the conscious mind yet accessible to the newly educated and insightful individual; this is where intuition and instinct com into play to help us identify in the midst of complex systems the decisive piece of information that would have otherwise eluded our rational mind.

Instinctual aptitudes can be instrumental in business.  People who employ instinct and intuition have a more and more decisive competitive advantage when navigating in the new economy. But what exactly is instinct? Here are some simple definitions to keep in mind:

– Instinct is our innate inclination toward a particular behavior (as opposed to a learned response)

– A gut feeling or a hunch–is a sensation that appears quickly in consciousness (noticeable enough to be acted on if one chooses to) without us being fully aware of the underlying reasons for its occurrence.

– Intuition is a process that gives us the ability to know something directly without analytic reasoning, bridging the between the gap conscious and nonconscious parts of our mind, and also between instinct and reason.

In everyday language these three terms can at times be substituted for one another. Some people may also understand or define these words differently. But at The Human Company, these definitions reflect the specific meaning we attach to each.

In the 1960s, Dr. Douglas Dean, along with his colleague John Mihalasky, studied approximately five thousand executives. Eighty percent of them said they believed in extrasensory perception (ESP) and used it to anticipate and seize profitable business opportunities. ESP is casually referred to as a sixth sense, gut instinct, or hunch, and for this reason ESP pertains to our subject matter: the importance and the role of instinct and intuition in decision making. This belief in ESP did not stem from the fact these highly successful businessmen had any theoretical knowledge of the subject, nor did it indicate that they would seek advice from a person with psychic abilities. It was simply the reflection of a direct experience with these abilities and their concrete applications to business. Dean and Mihalasky also studied a particular subgroup among the initial five thousand executives. They focused on 165 presidents and CEOs of American companies who had doubled or more than doubled their company profits in a five-year period. They found that 80 percent of them had above-average predictive computer test scores; that is, they demonstrated precognitive abilities. This piece of research on the use of everyday intuition for decision making in business led the authors to believe that precognitive ability was a reliable indicator of financial success. According to the authors, measuring potential aptitudes for ESP would be a much better indicator of professional success than other psychometric instruments. Some of the highly successful global companies I have worked for, like Estée Lauder Companies and L’Oréal, do give great importance to intuition. Mrs. Estée Lauder herself would rely greatly on her intuition, and today Estée Lauder Companies CEO Fabrizio Freda insists on maintaining and supporting intuition–in conjunction with a strong analytical capacity–in the work of his teams as a fundamental aspect in the success of the company. L’Oreal’s former CEO, François Dalle, who built the beauty company into a world-renowned multinational, insisted on “intuiting what is arising” as a key competence the beauty company executives had to develop and work with. This type of belief is not limited to the beauty industry. Konosuke Matsushita, Japanese industrialist and founder of Panasonic, once said. “No matter how deep a study you make, what you really have to rely on is your own intuition.”

Dean and Mihalasky’s well-known research has been available since 1974, the year of its publication. It is not new knowledge. And since then, similar studies have produced similar results. Another study was conducted in the 1980s, using two thousand managers over a period of two years. This study revealed that executives used intuition like “explorers” to “foresee” the correct path to follow, but they did so secretly. A well-known 1994 study conducted at the Harvard Business School produced a global survey of more than 1,300 practicing managers in nine countries: the United States, the United Kingdom, Austria, Brazil, France, India, Japan, the Netherlands, and Sweden. Of the 1,300 polled executives, 80 percent explained their success through decisions made intuitively, and 75 percent claimed they used intuition and logic equally. However, the study also shows that more than 50 percent of them would not publicly admit to relying on intuition. These last two examples prove that gut feelings and intuition are widely resorted to in business, but that there is definite prejudice against this type of aptitude.

So how come organizations I know and organizations I hear about still evaluate executives on criteria such as team management, interpersonal communication, entrepreneurship, and, more recently, emotional intelligence, but they do not integrate in their evaluation templates the ability to manifest as well as encourage in others instinctual intelligence and intuition at work? How come classes about intuitive skills are still so rare in business schools? A first answer seems obvious: we are culturally uncomfortable with what’s not exact and what cannot be demonstrated. Even if research shows that many successful business minds use intuition, it remains hard to conceptualize intuition and make it a tangible capacity that can be taught and measured. Besides, to share an intuitive opinion or to defend it in a fact-based environment such as a business presentation requires self-confidence and courage. All these issues are cause for leaving the challenging topic of intuition out of modern society in which the scientific mind is clearly seen as a warrant for truth and reliability.

Listening for Clues to The New Economy

In 2003, when the Indian auto giant Tata Motors decided to design a new low cost car, the Nano, for lower income consumers they made a key decision: rather than starting from a traditional four wheel car and stripping it down, they would start with an auto-rickshaw (a small, three wheeled vehicle) and build it up. Also, rather than making design assumptions based on decades of auto development for the middle and upper classes, their design team researched the features their new lower income target audience – many of whom had never owned a car before – would value. One of the interesting things they discovered in their research was that their new target audience didn’t care about having a radio; they preferred having extra storage space. At this point in the evolution of car engineering and design, a radio is seen as the most basic of equipment. It’s not terribly expensive, but in the context of trying to make the lowest cost vehicle possible, it could be eliminated and simultaneously transformed into something more valuable to the target consumer: space. Read More

“Intuitive Intelligence” on iTunes U: Top Download

The “Intuitive Intelligence” conference I put together for HEC MBA – first business school in Europe per FT ranking over the past 5 years – has become one of the top global downloads for iTunes U.

You can download it for free >>
iTunes U gathers more than 250,000 free podcasts of lectures, films, interviews from 600 prestigious universities and institutions from all over the world. The weekly statistics provided by Apple, routinely show 60,000 to 70,000 visitors. Read More

The Deloitte Big Shift Index 2009: What’s Missing?

If you have not already read “The Big Shift Index” report from The Deloitte
Center for the Edge
led by John Hagel III, John Seely
, and Lang Davison you should do so immediately.


This first release of the Shift Index reveals a startling fact: the return on assets (ROA) for U.S. firms has steadily fallen to almost one-quarter of 1965 levels; at the same time,  the researchers found modest improvements in labor productivity.

Grim news, indeed. The report also finds:

– The ROA performance gap between winners and losers has increased over time, with the “winners” barely maintaining previous performance levels, while the losers experience rapid deterioration in performance.

– The “topple rate,” at which big companies lose their leadership positions, has more than doubled, suggesting that “winners” have increasingly precarious positions.

– U.S. competitive intensity has more than doubled during the last 40 years.

– While the performance of U.S. firms is deteriorating, the benefits of productivity improvements appear to be captured in part by creative talent, which is experiencing greater growth in total compensation. Customers also appear to be gaining and using power as reflected in increasing customer disloyalty.

– The exponentially advancing price/performance capability of computing, storage, and bandwidth is driving an adoption rate for our new “digital infrastructure” that is two to five times faster than previous infrastructures, such as electricity and telephone networks.

The Shift
 consists of three indices: Foundation, Flow, and
Impact, and 25 metrics that together quantify the stock, pace, and
implications of the shift. The index enables analysts to
anticipate changes, identify bottlenecks, and guide strategy.
Not everyone, of course, will choose to monitor the same metrics or assign them
the same weights.  Thus, the Shift Index is less a single measure and
more an informational platform that will give rise to a diversity of models
and, a stronger collective sense about the pace and nature of change,
constraints and opportunities within that system.  As constraints
fall away and opportunities increase, old configurations become unstable
and new structures emerge.


A number of
key ideas in the report resonated with our observations at The Human Company:

– the importance of creativity and innovation in ROA

– information “flows” over
information “stocks

– passion as a driver for higher productivity

– more and more
discriminating consumers

– consistently declining return
on assets

– increasing rate at which big companies lose their leadership

– rising executive turnover tied to increasing performance pressures


However, I was surprised to find one element missing in their measurement model.

What’s missing? Sustainability and its impact on the economy.


is the business imperative for our time. From global-warming to competition for natural
resources, sustainability must necessarily sit at the core of any sound
business strategy. The sooner businesses understand this the better.

Organizations will have no choice but to
follow government regulations and anticipate consumers reactions and merciless
communication via ever more powerful social networks aiming at securing a
healthy future.

More importantly employers who align their
businesses to create a more sustainable world will also attract, retain and
empower more and better employees. Sustainability challenges have become so
pressing that they 
not only affect us at a rational and emotional level but they
also threaten our survival instincts. And  as such they are bound to impact employee productivity, loyalty, and creativity. Meaning is the underpinning and decisive factor of human efficiency. How could a corporation careless of its employees’ and
employees’ children future ever encounter long term success in a flat world?


In order to maintain competitivity, growth and profitability
organizations will have to build sustainable blueprints for the future. Take a look at Adam Werbach‘s latest book:
for Sustainability

The Deloitte report is an example of a brilliant work conceived in an
intellectual tradition largely limited to our analytical minds.
Yes, they do mention creativity and talent and yes, they talk about information flows, but I wish they had mentioned sustainability. A quick glance at the Intuitive Compass shows us that Deloitte overlooked the South West Quadrant. Regrettably, this is often the case with our business thinking.


Going forward, we cannot leave out the importance of our reptilian brain in its relentless ability to impact every second of our lives and its superior intelligence to sustain our species and hence help us make the best business decisions for a sustainable future (1).

Here’s looking forward to the the 2010 Shift Index; I hope to see a section on sustainability and a study on the decisive intangible dimensions of value creation which intuitive intelligence is designed to help us reckon with.

(1) In 2004 MIT School of Science Picower Insititute for Learning and Memory has shown that the basal ganglia which are parts of our reptilian brain are involved in our most sophisticated decision processes (Nature, Feb 24 2005)

Case Study: Creativity versus Results at L’Oréal


According to a recent report in the Wall Street Journal, L’Oréal SA, the world’s largest cosmetics maker, reported flat sales
for the first quarter of 2009 as consumers shied away from its luxury
skin creams and shampoos in favor of its cheaper brands. The maker of products ranging from Giorgio Armani perfume to Lancôme
skin cream and Maybelline eye shadows said sales increased 0.3% to
€4.37 billion ($5.83 billion) in the first three months of 2009.
Jean-Paul Agon, L’Oréal’s chief executive, said that he would not offer
specific guidance for the year but that results would “improve” during

After accounting for the effect of currency fluctuations, sales fell
9.3% in Western Europe and 5% in North America. This shortfall was
partly offset by an increase in revenue in Asia.

Sales at L’Oréal’s luxury cosmetics division fell, while sales of its consumer drugstore lines increased slightly.

This is an unfortunate turn for L’Oréal which has always been known for its commitment to scientific research and exceptional financial results.

In fact, you might say there is an unresolved tension in its culture between creativity and business results. This tension is visible even on its website. If you read about the “profiles they are looking for” under the marketing category, here’s a description you’ll find:

Creativity, imagination, openness to new ideas – coupled with the highest professionalism.
• Project-oriented, natural team player, at ease working with others in an environment of entrepreneurial challenge.
• Global-minded, flexible, able to juggle multiple priorities.
• Strong analytical thinker, excellent communicator.

You have a keen eye on the latest fashions, a finger on the pulse of emerging consumer and cultural trends. Highly developed interpersonal skills, a passion for results. The personality to make a difference.

Diagnosis: L’Oréal – When East dominates West…                

For the past few years I have been working with L’Oréal to change this dynamic.

The challenge: help marketers and managers develop a sensitivity to the creative nature of the beauty
product development process and specifically gain an understanding
for the process of research and development.

When the cosmetic group decided to develop a world wide talent appraisal process Sir Lindsay Owen Jones articulated the need to develop a competence key to the success of the group in the eye of the CEO, and that is: sensitivity to métier. What Sir Lindsay Owen Jones was aiming for was to develop a global, shared understanding for beauty products development, for L’Oréal customers, and for a number of other confidential important characteristics identified by the CEO as key factors for success in the beauty industry.

The Human Company was commissioned to research how to define this specific aptitude and how to develop it and train for it. We developed an international training track that is seen today as one of the most successful and inspiring training program available at L’Oréal.

Our approach consists in helping marketers understand how to engage and inspire creative people to contribute the best of their creativity.  We used the The Intuitive Compass™ to highlight the tension between results-driven managers and creative teams.


Our analysis: L’Oréal has a product innovation driven business model whereas most of its competitors have often a market-driven model. The company believes in scientific innovation to promote growth. Its founder was a scientist. It is how L’Oréal sustained 20 years of double-digit growth and became the world leader in cosmetics. There is, as I mentioned earlier, a tension in its culture between creativity and business results.

Results: We helped L’Oréal’s teams understand the perspective of the different teams.  The creative teams learned about the business aspects they had neglected, while the managers and marketers were helped to understand the creative process. The bridge is intuitive intelligence. Our training program is seen today as one of the most successful and inspiring training program available at L’Oréal. (Average rating: 19.5/20) because it is very relevant with the innovation imperative prevailing in the beauty Industry, articulated by the CEO Jean Paul Agon in his mandate. 

The Intuitive Compass™: A Framework for Intuitive Intelligence

We know that innovation is more about people and culture than it is about process and structures. Yet many executives find themselves unable to inspire their teams and foster a culture of innovation. This is not a new theme in management thinking, but it is one that has never been more important.

Early on, as my work took me deep into this realm – the world of intuitive intelligence –  I struggled to build a model to explain why this was so.  And so it was by accident, and by now we know that there are no accidents, that the model of The Intuitive Compass™ took shape:


Oddly enough, I was using Cartesian coordinates to explain the flaws in our linear thinking. The two principal axes, Play-Results and Instinct-Reason, give us four quadrants (NE, SE, SW, NW). Each of these quadrants represents a function or even a mindset in an organization. Let’s make a few generalizations to explain the framework:

The NE quadrant is the area where reason and results prevail. This is the realm of business administration and management. Most companies excel in this department, led by teh twin beacons of “maximizing shareholder value” and “cost management.”

The SE quadrant is the area where instinct is at the core and results are the rule of the game. This is the mindset one finds in a sales department, or in an athlete.

The NW quadrant is the area where reason engages in a creative thinking process as in strategic planning or marketing (think of an architectural firm or engineering company).

Finally, the SW quadrant is the area where instincts are at the heart of the creative process to invent and create from the unknown and the depth of the unconscious. This is where creators, scientists, researchers, and inventors experience eureka moments. Most executives and almost all companies, even those engaged in creative fields, lack a way to connect this quadrant back into the rest of the business.

The Intuitive Compass™ becomes a tool we can apply to assess and chart progress as companies (and executives) learn to harness intuitive intelligence in four key areas:

Strategy: how to employ intuitive intelligence to create sustainable, innovative business models which deliver real value to customers in their local environment.

Leadership: the transformative power of intuitive intelligence energizes, and builds movements – with clarity of vision and purpose.

Work Culture: the ecosystem health of your business culture is reflected in your bottom line results. The Intuitive Compass™ helps create the open culture you need to succeed in the intelligent economy.

Consumer Needs: map your customers needs and wants using The Intuitive Compass™ – creating a value innovation agenda for your customers.

The bottom line is convergence – with customers, employees, management and leadership.

Going forward, we’ll use The Intuitive Compass™ to chart how companies and leaders can use intuitive intelligence to shape the future – both in their industries and in the larger world.