Intuition in management

A double-edged sword

According to reports in the media, the competitor has launched a new product with a technology that our company is still in the early stages of developing. A management meeting is hastily convened. The managing director wants to change the priorities in research and development so as not to lose touch with the competitor. However, the marketing department is of the opinion that it would be better to use R&D resources for current products so as not to lose any more customers due to ongoing quality problems. Firstly, launching the new product would take a long time, and secondly, the whole thing is just hype anyway, which most customers wouldn’t be interested in for cost-benefit reasons. The Head of Marketing argues that the current course is absolutely the right one.

This is a typical situation that occurs in management in a thousand variations every day. It involves both minor and major considerations. What happens next may spiral off in countless different directions. Nevertheless, I have observed time and time again that the four typical scenarios outlined below are the ones most frequently encountered.

IMPULSIVENESS

Scenario 1: A certain course of action is espoused on a whim. In our example, the management responds to the press release and the lurid images it creates in the minds of the members by prioritizing the use of existing resources in research and development. However, this course of action does not follow on from a thoroughly prepared and well-considered decision that takes other priorities into account. Impulsiveness is nothing more than panic-induced action for action’s sake. It has nothing whatsoever to do with intuition, i.e. an instinctual understanding of what brings real as opposed to imaginary benefits.

ANALYTICAL ACTIONISM

Scenario 2: In response to the marketing team’s arguments, the managing director commissions an analysis of what it would mean to reduce product maintenance in order to free up resources for the new technology. At the same time, the market potential is also to be assessed: what market share can be gained, and how much would the company lose without the new technology? The inability to deal with vagueness and uncertainty that is expressed in this approach demonstrates a mistrust of one’s own intuition and that of others. It often leads to excessive time and effort being expended on analysis and evaluation. This is usually not an isolated case either, so at some point you wonder why you are spending more time navel gazing than advancing product development and working the market.

INDIFFERENCE

Scenario 3: This is at the other end of the scale. With an expression of great appreciation for the considered opinion of your Head of Marketing, you ignore the information that the competitor may have stolen a march on you and instead focus on market leadership and strengthening customer relationships by devoting R&D resources to existing products. This somewhat rash approach is based on laziness and an unwillingness to debate the pros and cons of the matter. In this scenario, people don’t even bother to listen to their own intuition. If this becomes a permanent phenomenon, the company is flying blind and putting itself in existential danger.

INTUITION

Scenario 4: Of course, there are many intermediate stages between the three preceding variants. In our fourth and last scenario, there is an awareness of what we are being told by our own intuition and that of others. This is combined with a strong focus on results and the knowledge that the key to success never lies in the facts, but rather in the subconscious intuition of experienced people, which is of far more value than all the charts and Excel evaluations in the world.

Perhaps you are now asking yourself: So, there is no need for analysis at all? Isn’t that a na?ve point of view? No, not at all. Let’s take a look at the sequence of events. One of the managing directors asks what the intuition of each individual member of the management team is telling them. Who in the group would do what? Of course, a sensible discussion doesn’t result in “Ms. Müller would do this” and “Mr. Meier would do that” followed by a vote on the various options. That would be déclassé.

Instead, a small number of propositions come into play along the lines of: “In my opinion, we should stick with our current course. I am assuming that the competitor will not succeed in bringing out a really successful Pilot 10 in the next six months, and that it will all come to nothing.” After the discussion, there may then be three, four or five propositions still in the running, at which point a decision will be made. Subsequently, further developments are closely monitored in order to subsequently correct the decision (if that turns out to be necessary), as the management team has in the meantime become smarter after they have seen a certain proposition confounded.

THE KEY TO SUCCESS DOES NOT LIE IN THE FACTS

It never ceases to amaze me how much we believe we have to take a fact-oriented approach to management in order to get a grip on what needs to be done. We often unnecessarily talk up the effort required to reach a decision (analytical actionism) and are then surprised that we are getting bogged down, that decisions are constantly delayed or – in the worst case – are not made at all. Consult your intuition and that of your colleagues, and do so in a targeted manner. If you like, you can use a scoring system: Which proposition do you support? And how confident are you on a scale of 1 to 10? If you award a 7, ask yourself what are the uncertainties that made you decide not to give a 10? Add up the scores, and you have already identified the front-runners, which may also need to be analyzed a little more closely so that you can make a certain decision with full conviction. This way of dealing with vagueness and uncertainty needs practice to make it perfect. There is a fine line between speed and negligence in decision making, but mastering the art is crucial for the future success of the company.

Matthias Kolbusa