Intuition in Strategic Thinking

Gisle Henden MBM MA MPHIL Dr stip

• Why is it important ?• What is intuition ?• How can we develop it ?

Why is intuition important in strategy?

Today, many companies have done much of the hard work of catching up on quality, cost, speed and flexibility.

That is, there is little to gain from further improvements in these areas.

How then, should we proceed?

Hamel & Prahalad

We need to explore and cultivate the potential of those activities, that are time-bound to a lesser extent.

The mind is the single most important asset in this respect.

Strategic Planning is Analytic

Strategic Thinking is Intuitive

Henry Mintzberg

What do research tell us? One critical finding, in a survey including

1300 practicing managers from nine countries, is that intuition is perceived as playing a major role in their professional lives. 56 % using both intuition and logic/reasoning in almost equal measure, and a further 7,5 % stating that they actually use intuition more. Almost 80 % believe that intuition has relevance in corporate strategy and planning.

Parikh et al. 1994

What do researchers say?

“Studying intuition is a way to create a more

realistic view of how strategic decision

makers actually think.”

Eisenhardt & Zbaracki

What do top strategists say?

”In these thirty years, that I have had

the pleasure to lead organizations, it has almost always gone well, when I have trusted my intuition. When I have done things the old, traditional way, it has not turned out so favourably.”

Jan Carendi CEO Skandia

What do scientists say?

“Fragmentation is now very widespread, not only throughout society, but also in each individual.

This is leading to a general confusion

of the mind, which creates an endless series of problems, and interferes with our clarity of perception, so seriously as to prevent us from being able to solve most of them.”

David Bohm

Cost, Speed & Accuracy of Intuition

The analytic approach to problem solving produces the precise answer more often, but its distribution of errors is quite wide.

In contrast to this, intuition is less frequently precise, but more consistently close to the correct answer.

Peters et. al.

Decisions aided by intuition are available immediately.

Analysis would seem to be slower & costlier.

Though, intimate knowledge of the subject, may be required for intuition to work properly. The investment cost of intuition is therefore much higher.

What is Intuition?

A HunchGut FeelingSudden InsightTacit KnowledgePerception of the UnconsciousForesightSynthesisLanguage of Metaphors, Symbols & Analogies

Intuition is the event which occurs when an individual reaches a conclusion on the basis of less explicit information than is ordinarily required to reach that conclusion.

Malcolm Westcott

Definition:

At any given moment one is conscious of only a small section of

what one knows.

Definition: Intuition allows one to draw on that vast

storehouse of unconscious knowledge that includes not only everything that one has experienced or learned, either consciously or subliminally, but also the infinite reservoir of the collective or universal unconscious, in which individual separateness and ego boundaries are transcended.

Frances Vaughan

Intuition ….

Looks in-to-itPerceives what is unconsciousVisualizes it as pictures, symbols, archetypes, metaphors, analogiesConnect and link it to consciousnessSynthesize elements of knowledge and information to coherent patterns and wisdomFinds the meaning

Can intuition be wrong?

Intuitive problem solving;

Intuition advocate harmony between thinking, feelings, and information provided by the five senses.

How can we develop our intuition?

Meditation, quieting the mindReceptive, non-judgmental attitudeDream interpretationVisualizationGuided imageryUnderstanding of symbols, myths, and archetypes. Focus simultaneously in and outUse environment as mirror

Preferences in Judgement & Perception

Direction of Energy

Extraversion (E)Focus on the people and things in the outer world

Introversion (I)Focus on the thoughts, feelings and impressions of the inner world

Gathering Information

Sensing (S)Focus on facts and details that can be confirmed by experience

Intuition (N)Focus on possibilities and relationships among ideas

Making Decisions

Thinking (T)Use impersonal, objective, logical analysis to reach conclusions

Feeling (F)Use person-centered, subjective analysis to reach conclusions

Dealing with the Outer World

Judging (J)Plan and organize; make decisions and come to closure

Perceiving (P)Be spontaneous and adaptable; collect information and stay open to new options

Your Values

Take some time and try to figure out what your three most important values are.

Intuition versus Sensing

A cynical person knows the prize on everything, and has no clue about the value.

The beauty is in the eye of the beholder.

Happiness is not to have many things. Happiness is to be satisfied with what you’ve got.

We don’t love people because we find them beautiful. We find people beautiful because we love them.

Intuition versus Feelings

It is not a problem being treated unfair, if you do not allow yourself to remember it.

We may not trust our emotions, but nevertheless, they reveal the greatest secrets.

By hurting others you are also hurting yourself.

Intuitive understanding ....

Strangers are friends that you have not met before.

We should be interested in the future, because thats where we are going to spend the rest of our life.

The best we can do for others is not to share our wealth with them, but to show them their own.

Exploration versus Exploitation

Refinements & improvements of conventional knowledge and established methods, provide short-run gains that are compelling.

As we develop greater and greater competence in using these established technologies & strategies, we become less and less willing or able to change to newer ones that offer longer-run superiority.

James March

What to do?

Treat intuition as real Treat memory as an enemy Treat experience as a theory Treat the self as a hypothesis

James March

A little story ....

There was a poor farmer who had a chicken, which suddenly produced an egg made of gold ......

His surprise was great, when this happened the next morning as well. And the next, and the next, .....

After some time, he became rich and greedy. He decided to kill the chicken, opened it up and

searched for even more eggs ......