The Chief Executive Officer of a prominent business in Australia was recently asked to describe a lesson that they had never forgotten. This Chief Executive Officer replied "Intuition plays a huge role in business". How important is intuition to you?
I would wholeheartedly agree with this CEO. In my observations intuition plays an enormous role in the way, commerce is conducted and the way decisions are made. This does not necessarily mean that this is a good thing but it must be recognised that the intuition of managers and owners of businesses strongly create the direction that those organisations travel.
So what is intuition? The MacQuarie Dictionary defines intuition as the direct perception of truths, facts etc independently of the reasoning process. Wikipedia says that it is the ability to sense or know immediately without reasoning. You'll note that in both of those definitions the absence of reasoning is a key part. What? What are you saying? Are you saying that many business decisions are made without reasoning? Absolutely!
My observation is that we are generally proud of our intuitive skills. I have particularly observed this in people that lead organisations or who are in management positions. Those who hold leadership positions like to think that their experience will lead them to make correct decisions, often without a detailed reasoning process.
Where do we get our intuition from? Generally, this comes from our past experience and knowledge. Throughout our lives we experience different people, commercial situations and other factors that build up in our brain and that help us to make sense of the world that we are in. This is necessary, but it does not mean that our perception of the world, which is an aspect of our intuition, is correct.
For example, say you are looking for a new salesperson in your enterprise. There are five resumes that you have been given to consider. The candidates all seem to be reasonably qualified and experienced in the particular product that you sell. Yet, you develop thoughts and feelings about the people described in the resumes without ever having met them. These thoughts and feelings come from the words in the resumes, the way they are presented, your perception as to whether the candidates are being completely truthful and other factors. Your intuition may lead you to interview two of the five candidates only. But was this the right choice? You will never know.
The benefit of intuition is that it can cut down the research and deliberation time in making a decision. The drawback is that our intuition (which I think most of us are proud of) can lead us into making irrational decisions. Instead of applying a proper reasoning process, we go with our "gut feel" because we are so convinced that it is right and that our years of experience can be relied on to make the correct decision. In a sense, you are saying to yourself and to those affected by your decision "Just trust me. I know that I am right, although I can't say why".
We get into trouble when we are convinced that our intuition is always right. Going with my gut feel is easy because it takes no work. It also may appear to be decisive and leader-like to my employees. But if this happens frequently, it is more likely that I am operating out of arrogance rather than accurate intuition.
Nevertheless, I do think that intuition is an absolutely necessary part of the commercial world. This is because each day there are millions upon millions of decisions needed and taken. If research was applied to each of these decisions, nothing would get done much.
The reliability of your intuition is greatly determined by the depth and breadth of your past experiences and knowledge and your ability to process that information through to a logical conclusion. Of course, when we are using our intuition, we don't usually stop and think about whether our past experiences have qualified us to use our intuition in a particular situation. Perhaps we should do this more often.
So what should we do with intuition? Like the CEO I mentioned at the start of the article, there is no doubting that intuition does play a huge role in the business world. To be effective, we must use our intuition constantly. However, it is only as good as our knowledge and experience. Therefore we must ensure that we keep honing our knowledge and experience so that our intuitive decisions are more accurate. We must also learn to resist the urge to use our intuition when an important decision demands a more thorough thought process.
Wishing you easier business.
John Jeffreys
John Jeffreys wants you, the business owner or manager, to have an easier life. John Jeffreys helps you to achieve this by drawing on his 30 years business experience as a Chartered Accountant and partner in major accounting firms. For instant access to videos, audios and software products, visit http://www.businessease.com.au
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