Intuition at work

To enhance your business intuition, you have two primary choices:

1. Patiently accumulate experience until it starts to guide your decisions. 2. Actively cultivate the skills of intuitive decision making by: - Grasping the concept of intuition. - Mastering the techniques and disciplines of decision making. - Learning to merge intuition with analysis.

Reflect on these questions: - What is the origin of your business instincts? - What triggers your mental warning signals when you observe something? - What is the method you've been taught to make sound decisions?

The conventional wisdom for making a good business decision is: 1. Thoroughly dissect your problem. 2. Enumerate all your various options. 3. Assess those options based on consistent criteria. 4. Determine which option yields the most benefits.

This approach seems appealing in theory because it's systematic and logical, rather than leaving the outcome to luck. However, this method often falls short in real-world applications. More often than not, decisions must be made in difficult situations where: - Confusing and intricate factors must be considered. - There are restrictions on the amount of information available. - You face significant resource limitations. - Small pieces of inconclusive evidence are plentiful. - Making the wrong decision carries severe consequences.

In other words, in most situations, people don't adhere to the traditional, scientific model of decision-making. Instead, one method is usually preferred over all others, and the facts that support that preferred method are highlighted while conflicting facts are ignored. Or the evaluation criteria are adjusted until only one decision can be made.

Since intuition already has a greater influence on our decisions than we might admit or even realize, it deserves further examination. The five key components of a practical model of business intuition are:

1. A new situation generates a set of cues that are typically grouped together. 2. This group of clues will form a pattern. An experienced manager will examine a set of clues and determine whether it matches any pattern they've seen before. 3. Based on the pattern used in past situations, an experienced individual will have a specific action plan in mind. They will predict what will happen next and the most effective course to follow. Action scripts are the typical responses of an experienced person. The more experience a person has with a specific pattern, the clearer the best course of action will be, and the easier it will be to make a good decision. 4. Mental stimulation involves consciously envisioning the outcome when an action script is executed. An experienced person will anticipate the results of specific actions and will look for signs that this is actually happening. 5. To create an effective mental simulation, mental models of how things work are necessary. Experienced individuals understand how things work from their own hands-on examples. Managers assist their subordinates in developing better mental models to enhance their future effectiveness.

In most situations, all of these elements are processed so quickly that it seems as though intuitive decisions are made instantly, but this is not the case. All of the key elements are processed in quick succession.

The benefits of intuitive decisions in business are: - Situations can be assessed quickly – instead of requiring a lengthy, painstaking effort to analyze them. - Problems and anomalies can be detected early – before they escalate into more serious issues. - Confidence – the first option that comes to mind is a good one. - Anticipation of what will happen next – so adequate preparations can be made in advance. - Avoidance of data overload – keeping things simple and manageable. - Ability to remain calm and composed – even when required to act under pressure and uncertainty. - Alternatives can be found – when a plan encounters any kind of difficulty or obstacles. - Recognition of similar patterns in the future – allowing you to improve over time at performing those tasks that are central to your career.

Clearly, the key to reaping these benefits is to gain enough real-world experience in your specific field to develop expertise. The wider your experience base, the more intuition you will have. However, this is too important a resource to leave to chance. What is needed is a training program through which intuition can be acquired and enhanced through a series of meaningful experiences. In other words, since intuition is critically important, it makes sense to undergo a planned set of exercises that will provide "deliberate experiences" that will build into intuition. This way, you are approaching intuitive decision making in a constructive and deliberate manner rather than hoping that random events will provide us with the necessary experience.