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Ravi Kiran
I help ambitious businesses in Middle India scale. Rapidly and properly.

My Grandma, the Met Office – Intellect Versus Intuition in Business Decision Making

“The intuitive mind is a sacred gift and the rational mind is a faithful servant. We have created a society that honors the servant and has forgotten the gift.”
-Albert Einstein

When I was a child, my grandmother used to predict the timing and nature of rain a few hours in advance. It would still be sunny and she would tell us when to stop playing outdoors and run inside our house. I had not learnt Statistics back then, so I didn’t keep count, but I would think she was right about eight out of ten times. We would run back home and it would start drizzling. My brother said Grandma had a sixth sense about rains.

Recently, a client asked us if he should hire a software guy to gather and provide them data so that the leadership can make better decisions. “Earlier it was easy to decide on things, but now we are a bit worried.” This got me thinking.

Left Brain or Right? Whether business leaders and managers should use data, information and knowledge or whether they should use hunches and sixth sense has been a matter of great debate in Management Thinking for a while. It’s the thinking versus feeling, left brain versus right brain, and intellect versus intuition debate.

For all we know, the world may be equally divided on this issue. Most practicing managers, whether they run their own business or someone else’s know that you need both, and you need to know which to use when and how to mix them, but the debate never ends.
Books have been written on the Intuitive Manager. Hard hitting blog posts have been written on the role of evidence versus intuition in managerial decision making.

More intuitive or data starved? I have not read many Indian articles or points of view, but the Western world clearly keeps debating the issue. So even while massive companies keep getting built to analyse large quantities of data, mega-processors are put to use to understand and predict the future and new fields such as data analytics and business intelligence keep growing, the opposite argument, that good leaders and managers need to use their intuition and that business decisions are more than just numbers, is also equally strong and is perhaps growing.

The paradox in India is palpable. We Indians are regarded in the world amongst the best in our analytical ability, yet most of our data analytics companies and practicing managers lament that the availability of quality data, which can be processed to create information and knowledge is very low.

As a consequence, except in a very few MNCs, Indian managers are known to depend much more on intuition and judgment than on intellect.

Is intuition, which is often thought of as a ‘gift’, superior to Intellect, the ‘grind’, as a business decision making tool? Should those who think of themselves as ‘intuitive’ managers be granted a slightly higher position on the pedestal?

I have been observing the needle move in Metro India, particularly in good size companies, away from pure intuition to a good mix of intellect and intuition. This usually leads companies to implement a conceptual information architecture, and a process to gather, analyse and make meaning out of data. Companies even attempt to present data to their leaders in a more decision-friendly manner through executive dashboards.

The Middle is too slow. What I usually see in Middle India, though, is different. Intuition remains the dominant decision tool. Even when businesses have an MIS Manager or a business analyst, the data generated is rudimentary and remains sub-optimally processed. In fact, sometimes an MIS Manager is nothing more than the manifestation of the owner’s need to belong to his peer group, without any serious conviction on his part.

So, when the client mentioned above asked a simple question that will eventually create a Decision Support System, I had no doubt that this behaviour is more of an outlier than mainstream.

Mr Einstein would perhaps have been happy to have be in Middle India today. He would have seen an abundant usage, perhaps an overdose, of intuition by business owners in taking decisions.

Why do business owners in Middle India lean on intuition more than intellect? Is it that they have stronger intuitive power? Is it that they have better access to experience and have developed a more acute sense of observation? Do they have some sort of a psychic power so that ‘they just know it’? Or is it that since they ‘own’ the business, they are willing to weather the risk an intuitive decision may involve? Could it be that they have little personal fear of the outcome of their decision since they are accountable to ‘no one but myself’?

While any or many of these may be the reasons for the reliance on intuition, I sense a new, perhaps more plausible reason – ‘they know no better’. Despite growing exposure of entrepreneurs from Middle India to modern management thinking in the Metro or even outside India, their decision making styles continue to come from historical practices and a lack of awareness of what intellect and formalized knowledge can actually do for the business. It’s the ‘I don’t know what I don’t know’ syndrome and it’s fully understandable.

I feel while the owner’s intuition is the starting point for most businesses and some extent of scaling can happen based on continued application of intuition, the problem becomes acute at a certain stage of the business, say when the business has reached a top-line of INR 30-40 Cr. As an ambitious business owner wants to grow rapidly, he may face several roadblocks which work as growth inhibitors and reliance on intuition may start failing him.

1. Too many decisions: As the business grows, so do the number and frequency of decisions. Sooner or later, the owner-leader of the business will run out of bandwidth and some decisions will become flawed.
2. Problem Complexity: Growing businesses have more complex problems. Except extreme psychic abilities, I can’t foresee normal human talent and skills to consistently produce effective decisions based on one man’s intuition.
3. The Intuition Conflict: As the business grows, so would be the number of decision makers. Since intuition is a personal thing, which intuition should count if two people have different intuitions about the same situation? If I am a senior manager or even a family member, will I always slave my intuition to that of my boss or family head?
4. The Inability to Institutionalize: We all know that as a business grows, the organisational processes need to be less subjective and more institutionalized, so that the organisation behaves reasonably consistently. Is it possible to develop an ‘organisational intuition’ as a decision making mechanism? Tough.

An HBR blog post by Enterprise 2.0 author Andrew McAfee makes a very strong point on the need for evidence versus intuition as a decision making tool. I am not even thinking of it as a ‘versus’ issue. To me, what’s the mix? Do you shortlist decisions based on intellect, and then make the final decision on intuition and judgment or do you do the other way around? Which way does your 80:20 swing?

In essence, it’s a simple thing. Ambitious, growth-focused business owners have no choice, but to build an organisation where professionals, and not just family members and friends, want to come to work, which outside investors want to fund, with which the best-of-the-crop vendors want to have a relationship and whom the customers want to give their hard earned money.

No matter how strong they think their intuitive faculties may be developed, businesses owners need to build an Intellect Engine – gathering information, processing it well, and creating decision options with consistency. Knowledge that comes from outside creates knowledge inside and eventually becomes Intellect. Having a strong intuitive ability and ‘sixth sense’ is good and if used well, can save time and communicate vital leadership messages to the organisation, but snobbishness has no role in business. I do not believe intuition is superior to intellect, a business decision maker needs both.

A colleague told me some time ago: “The better I analyse data, the more intuitive I get”.

I loved my grandmother, but if I were to predict weather patterns that affect the livelihood of thousands of farmers and fishermen, I would much rather combine her intuition with the data gathered by satellites, processed by computers and analysed by meteorologists. Both can go wrong, but apparently evidence shows one has a higher chance of being right.

What do you think? Let me know.
Post Script: This post is not based on any scientific research and nothing written here can be assumed to apply to all business owners in Middle India. I have written what I have begun observing as my work gets me to meet dozens of smart business owners every month. It’s possible that your personal observations, as a reader, may be different and I respect them if they are. Do share your thoughts and perspectives, so that other readers and I can learn too.

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I do not have any experience of Middle India. But I do know that while you are correct that data is not being used enough, data has the power to transform a business. How companies store, transform & use their data will become as potent a marketing tool as Brand equity itself! Companies have huge amounts of data now and there is technology & skill sets available to decode it. If used powerfully enough, data about a customer can transform the customer experience! When a bank calls you just when you have made that “high value, jewellery” purchase on your credit card, is an example of data driving a customer experience. You are immediately relived that your bank will be alert if your card gets into the wrong hands! More about this here: http://blog.hansacequity.com/Customer-Management-blog/bid/41348/Data-Equity-will-rival-Brand-equity-in-the-days-to-come
 
 
Ravi Kiran
As a child, I used to wonder where mosquitoes in winter hide, why fish keep swimming, how birds learn to fly and other such 'un-natural' occurrences. After a career in marketing & communications for over 20 years, building and running businesses of excellent size and in many a geography, hiring and training dozens of successful managers, I continue to be aggressively curious about beings and things.

Today, as a founding partner in Friends of Ambition, a growth advisory company three friends of mine and I started recently specifically with the aim of assisting and guiding ambitious businesses in India’s mid-sized towns [we call them Middle India] in chasing their dreams, I am curious about 1st and 2nd generation business owners in that geography. As I often find myself in cities and towns I might have only heard of just a few months ago, meet business owners there and hear their stories, dreams and challenges, I feel a sense of elation and sadness, sometimes simultaneously.

This blog is a chronicle of my experiences in Middle India - mostly gleaned from real life encounters with business owners, their influencers and well wishers.

Scaling a business is something I have been fortunate to learn firsthand, as I helped build and ran several businesses for Starcom MediaVest Group, a part of Paris based Publicis Groupe, as its CEO- South East and South Asia.
 
 
 
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September 09, 2012 18:51 pm by Ajay Kelkar
I do not have any experience of Middle India. But I do know that while you are correct that data is not being used enough, data has the power to transform a business. How companies store, transform & use their data will become as potent a marketing tool as Brand equity itself! Companies have hug...