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Trust Your Gut

199 Comments

The human elements of the future can never be predicted, even with science and analysis. So to plan for these and to make successful business decisions, you need to trust your gut instinct.

Analysis is a reactive science – some things we cannot predict and explain until they have already happened, and sometimes not even then. Future trends and behaviour are no exception. By way of example, I recently read an article that tried to reduce the Twitter phenomenon to a predictive science. Why is it so massively popular and can we automate the tweeting process to ensure virality? They studied many metrics like best day of the week or best time of day to tweet. But is there really a science behind having success on social media?  The beauty of marketing on the Web compared to traditional marketing efforts like print is that Web results are measurable. However, there’s only so much measurement and automating of communication you can do, and automation can never take the place of real, live, authentic person-to-person (even if digital) communication.

My husband, a statistics PhD, often says that you can manipulate statistics to give you the results you want to see. So can we really trust measurement to give us the right answers?

As much as the MBA teaches us this to do this, can we accurately predict human behaviour with analysis and measurement alone? A case in point is market research. Towards the end of 2009 we conducted a research survey on our MBAconnect.net members to determine what new products and services they wanted on MBAconnect.net. Henry Ford himself said “If I had asked my customers what they wanted, they would have said faster horses.” So rather than asking members to come up with new ideas for new products and services, we suggested ideas based on members’ past suggestions or gut feel of what they would like, and asked them to rate these. MBA refresher events came out most popular. So we started holding these in 2010, and they did prove to be very popular with our members. Funny thing was, the people who did attend these events weren’t those who had voted for them in the survey. In fact, few of the respondents who had said in the survey that they found these very appealing or quite appealing, actually attended. Why was this? Think of it as being asked in a survey if you would buy a BMW or a Ferrari: sure, most of us would buy one if we were asked this question hypothetically. But in real life would you? Many other factors come into play in the real-life decision-making process that aren’t present under survey conditions, such as: can you afford it at this point in time, do they have the colour and model that you want, is the car suitable for the stage of life you’re in? And so on. So no matter how rigorously you conduct surveys, what people say they will do under survey conditions is very different from what they actually will do in real life.

A valuable lesson from this is that the human behavioural element is key, and sound business decisions cannot be made on analysis and measurement alone.

So as a leader in your company, if you cannot predict the future with analysis alone, how do you make sound business decisions that are likely to succeed? The missing link is gut instinct. This is the secret behind many successful business leaders like Richard Branson or Steve Jobs.  And no automation, science or MBA training can replace this key ingredient of success.

Steve Jobs and Richard Branson don’t have the traditional MBA training that many think creates a successful business leader. But no-one can dispute their skill and success in this area. Business training may enhance the inherent skill you have as a leader, but that underlying skill still needs to be there. And for that, you need the gut instinct element, the ability to instinctively know which business decision will lead to a successful outcome. This is why most investors “back the jockey and not the horse”. In other words, they invest in the entrepreneur and not the idea, because they know that a good entrepreneur will make a success of a good business idea, but a good business idea in the hands of a lesser entrepreneur is unlikely to succeed.

How does the gut instinct play out in practice? It all comes down to listening to and engaging with your customers, being part of their conversation, and then letting your gut feel as a leader guide you in making the best business decision with the information you have at that time. Two business leaders may do similar research to assess a business situation, but they’ll use different gut feel criteria to determine the best business decision they need to make. And the superior business leader will be the one whose gut instinct leads him or her to make business decisions that, time and time again, lead to successful outcomes.

And because it isn’t an exact science, you’ll make mistakes along the way. Sometimes you’ll misread the situation and make the wrong decision. But only hindsight will tell you that it is the wrong decision. You needed to make that mistake to learn from it and to better understand your customer’s needs. If you hadn’t made that error now, you’d need to make it in future. This is why we need to encourage trial and error, and be tolerant of mistakes in our team and in ourselves. If we punish every failure, people will be afraid to try. Like any skill, we improve with practice, we need to practice decision-making and listening to our gut instinct in order to become better at it. That’s why in the US culture, many venture capitalists prefer to invest in experienced entrepreneurs who’ve been around the block a few times, even if their track record isn’t one of success. They recognise the value of experience in making you a better entrepreneur more likely to succeed the next time around. But that raw talent of a successful business leader needs to be there in the first place, in order to improve with experience.

So the key question is: are you giving yourself the opportunities to become a more effective business leader? Are you practicing your gut instinct in making business decisions?

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Author: Colette Symanowitz

Managing Director of www.BeatingBullies.com and www.MBAconnect.net. Passionate about entrepreneurship, personal branding and networking. I also tweet under @mbaconnect_net and @Beating_Bullies

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