The Gut Feel: How intuition can lead you to success in business

Chapter Eight: Intuition and Keeping (or getting) out of trouble

Chapter Eight

Firms go through a crisis at some point of time even with the most diligent management. Getting out of these problems is not easy using reasoning as reasoning may even tell you to give up. An entrepreneur must be able to see different perspectives and use intuition in these circumstances. A crisis may also bring emotional trauma to an entrepreneur where his or her intuition shuts down. Personal crisis management strategies to return unbiased intuition to the entrepreneur are discussed.

Intuition and Keeping (or getting) Out of Trouble

One of the major potential occupational risks of being an entrepreneur is going through some form of crisis. This may be some form of crunch like the loss of a major customer, cash-flow problems brought on by over commitments or shorts falls in collection, or the loss of business through the defection of employees to rivals. These crises could even bring your venture to the verge of bankruptcy and is so common in the territory of entrepreneurship.

It sounds easy to keep out of these sorts of problems by checking on your daily cash-flow, making commitments carefully, keeping inventory levels low, having a diverse portfolio of customers, etc., that keeps balance. However it is human nature to want to trade higher than one can really afford to, make commitments that may strain finances for a short period of time in the belief that this short fall can be made up by doing this or that. But the reality is we all fall into some form of crisis or another because of our poor judgments, or events that we didn’t foresee. Looking at this in reverse however, we find that our judgment is poor only in a small number of decisions and in actual fact most of the time prudent decisions have been made. Most of the time intuition and gut feel gets us by, but those poor decisions are the result of what we discussed back in chapter four the over influence of our ego on the decisions we make. We always want to make that extra sale because it feels good, when we may know that this may require buying more stock which may strain the cash position.

Getting out of these problems is just as much a matter of intuition as it is about management. In fact the reasoning of management might convince you that it’s a lost case and time to give up and pack up. I remember back in the mid 1970s in the family business when it had overcommitted its spending and the banks wouldn’t support the overdraft any longer. One of the most notorious financial administrators were with the board in the meeting room advising them to appoint an administrator to wind up the company. Most of the grim faced family was resigned to this destiny until my uncle who was chairman at the time stood up and said “this company will wind up over my dead body.” This battle cry rallied the others who fought off the attempt of the financial administrator to put the company into receivership. A few years later the company doubled its size and was floated on the Melbourne Stock Exchange. Sometimes its intuitive acts like this that acheive great things. They will never happen through analytic thinking and reasoning, only through intuitive action and taking the challenge. Billy Ocean’s “When the going gets tough, the tough get going” is a true acumen for entrepreneurs.

Another example of getting into trouble, this time through reasoning was the launch of new coke in 1985. The Coca Cola executives back in the 1980s were watching Pepsi gain market share and then worked on a plan to revamp the coke taste to fight back. After strenuous market research including numerous focus group taste tests which all showed that consumers preferred the taste of New Coke, the Coca Cola executives made the reasoned decision of replacing the old formula with the new formula, expecting great success. The Coca Cola Company faced the largest consumer backlash of any company in corporate history and had to reintroduce the original taste 3 months after the New Coke launch. The New Coke fiasco is a clear case of following reasoning over intuition. The Coke executives failed to feel the strong emotional bond of consumers with the Classic flavor, which no research would show out.

Nothing looks the same from different perspectives, even something as simple as a vase of flowers. So if a vase of flowers doesn’t look the same from different perspectives, complex situations must have a multitude of different perspectives. Good decision making is based upon finding and understanding multiple perspectives about a problem. Then intuition and reasoning can be merged into one decision making process. Had the Coca Cola executives been able to see other perspectives, their decision to launch New Coke may have been different.

Figure 8.1. A vase with flowers will look different from different perspectives

One way to make decisions in a crisis marrying both reasoning and intuition together is by the use of lists to separate information, thoughts, ideas, and feelings, so the situation can be looked at from different perspectives. This helps to break down the restricted frames we are thinking through. For example one may create a list of factual information, another list recording the risks and dangers, another looking at the positive aspects, another looking at alternatives, and another list recording what the consequences of any action would be. This approach to thinking was made famous by Edward De Bono’s six hats, which many of you may be familiar with.

However remember with the use of lists or the six hats methods, they will not make a decision for you. As we have seen intuition and reasoning are often in conflict and this is necessary to resolve any crisis. For example a man who loves two women may put the good and bad points of both his loves on paper and find that the positive attributes of one of his loves comes out on top of the other. Rationally he should chose this person, but he chose the other one, deciding not to follow the reasoning the lists enabled him to see. But a decision is forced – for better or worse.

Figure 8.2. Lists help a person to remember and prompt further intuition

When something drastically goes wrong like a customer asks you to hold onto the cheque that you want to bank to meet your own commitments, a trusted employee resigns suddenly, or you lose a major customer, emotions like anger, despair, confusion, disappointment, or anguish start to take control of your thinking. Intuition is shut down as your mind is absorbed in an emotional state. There is very little chance that anybody can come up with possible solutions that are not just emotionally influenced reactions. One way to return to a less stressful state that will allow intuition to return is to try and get yourself into a more emotionally stable state.

The best advice is that given by Julie Andrews in the movie The Sound of Music singing My Favourite Things. “when the dog bites, when the bee stings, when I’m feeling sad, I simply remember my favourite things and then I don’t feel so sad.” It works, but getting there requires disciplined thinking. What works for me, may not work for you, but get away from your office and do something you like. Force yourself to not think about it, no matter how hard it is, until a change in mood occurs. Usually with the time lapse, the change of mood, your intuition may begin to kick in again with some suggestions free of the emotion of hate, spite, anger, revenge, etc, things we may all feel when we are betrayed. Once again, it isn’t easy and I particularly sympathize with type “A” personality types. The amazing thing about crisis is that life goes on regardless, and in most cases we become stronger after the experience, and wiser.

Major life decisions no matter how hard we try cannot be rationalized, only be made intuitively. All crises can be evaluated but an intuitive decision made. Remember firms rarely survive on rational decisions; otherwise Disneyland would have never been created in Florida many years ago by Walt Disney.

Summary

·       All firms go through crisis from time to time.

·       Logic is usually not very helpful in getting out of many problems.

·       An entrepreneur must learn how to see different perspectives of situations in order to avoid getting into a crisis.

·       A crisis usually creates emotional trauma for the entrepreneur where his or her intuition shuts down.

·       The entrepreneur must learn how to get free of the emotional stress so clear intuitive decisions can be made.                                                                                                                                          

Some More Intuition and Keeping (or getting) Out of Trouble Tips

·       Go and re-read one of your old school novels. Pick out some of the main characters and look at the emotions behind what they did.

Next Chapter: Chapter Eight: Intuition and Keeping (or getting) out of trouble

Click on subscribe so articles can be directly emailed to your inbox: