The Difference That Makes The Difference In CEOs Decision-Making

Monday 22 August, 2005

by Jane Mara

What separates a great CEO from the norm? Their willingness to access and rely on their intuition in decision-making.

We are all intuitive yet many of us dismiss that niggling feeling, that gut reaction or hunch that "things are not as they seem". As John McFarlane, CEO of ANZ Bank was quoted in the media as saying: "When I go against my instincts [intuition] nine times out of ten it goes wrong". Paul Kerin, Senior Lecturer at the Melbourne Business School agrees when he says "The best CEOs rely on their intuition". Paul acknowledges that certain industries may attract people who have worked their way up from the shop floor and have refined their gut responses into a valuable business resource. My own research demonstrates that intuition is the 'difference' that makes all the difference to their success.

Key points: Your Intuition is a skill that can be trained and strengthened The ability to balance intuition with logical analysis is your 'secret weapon'

Intuition (knowledge gained without logic or reason) fell out of favour when we began to trust the knowledge given to us by external sources. Scientists have encouraged us to become less trusting of our own knowledge. The 'gut' feelings, insights and hunches we have, became ignored as we relied continually on logic and analysis.
The information overload that we experience daily, combined with less time for planning and development of new strategies and products, mean that decision-making is stressful, with little time for analysis. Intuition is particularly suited in environments of rapid change where innovation and creativity are encouraged to thrive.
Successful visionary leaders rely on their intuition. Researchers have discovered that the higher up the corporate ladder a manager progresses, the more they rely on intuition and that 80% of successful CEOs have a highly developed intuitive style.
Intuition is a skill that we are all born with that can be accessed intentionally, if you choose to work with it. In our fast paced world there is simply not enough time to digest all the information that is available. Decisions have to be made. The analysts have ruled our decision-making relying on the hard facts, yet this has not served our needs. Research tells us that 50% of decisions made logically are later proven to be wrong. The CEO making a decision is ultimately held accountable for the outcome.

So how do you get in touch with your intuition?

The first step is to acknowledge that it exists and recognise how your intuition shows up for you. We are all different and each one of us has their own dominant intuitive response. The willingness to slow down and take the time to access your intuition is essential to listening to your inner voice. Many CEOs today actively practice meditation and creative visualisation techniques. These methods are excellent ways to get in touch with your own intuition. The best ideas that you have rarely occur when sitting at the desk or in a meeting. Many CEOs tell me that when their active mind is more relaxed in another activity, for example, walking or in the shower, then 'Aha' moments occur. Sounds simple, does it not? Many people are so stressed and with their schedules constantly overloaded, they have lost touch with their own inner wisdom.
Corporate life has, to date, not placed a high value on intuition. Daniel Goleman, author of numerous books on Emotional Intelligence says it is one of the competencies that is essential for today's leaders. Intuition is an integral part of our self awareness. Self awareness leads us to a greater understanding of ourselves and other people and situations.
We experience organisational culture through the actions of the CEO who either creates an environment of trust and confidence in the workplace, by expressing a willingness to listen to and to try out new ideas, or a culture of fear and reprimand. An environment that tolerates ambiguity and risk taking with a culture that gives permission to fail is one in which intuition is allowed to thrive. Bill Gates of Microsoft often spoke of intuition in these terms. "Often we had nothing else to rely on, except intuition" when asked about the early development days at Microsoft.
The University of Queensland (UQ) Business School has studied the role of intuition in management decision-making. UQ PhD student, Marta Sinclair began her research by reviewing the factors that influence managerial choice of decision-making styles. Cognitive research tells us we process information in parallel, using rational analysis on the conscious level, whilst relying on emotional cues on the non-conscious level.
We are capable of using intuition and analysis simultaneously and interchangeably, without being aware of it. The integration of analytical/intuitive management styles has been highlighted in many management texts - Herbert Simons' idea that "analytical and intuitive management styles are complementary components of effective decision-making styles" is one example.
The context of the problem, the type of decision and the person making the decision, determined what type of decision-making style was adopted. For example, if the problem had complex, contradictory or little information surrounding the facts, the intuitive decision-making style was more useful than the logical approach.
Would you be willing to listen to an employee who said to you: 'I just have a gut feeling about this project?' DuPont discovered that their product development time shortened from three years to just less than three months by actively engaging their intuition into their product planning.
Management students at Harvard Business School are taught the importance of recognising intuition and its role in the decision-making process. Australian CEOs are late adopters in learning how to work with their latent skill of intuition.
Intuition is a mandatory skill for all decision-makers. Intuition is particularly relevant when the 'hard' data is contradictory or is not accessible. Relationships with people, your staff, your customers, peers and associates, can be easily enhanced using your intuitive mind.
As Henry Mintzberg of the McGill University Faculty of Management proposes: "Organisational effectiveness lies in a blend of clear-headed logic and powerful intuition".
Trust your gut, today.

Source:ceoonline.com