Use your gut feeling, but don’t forget the facts

The Harvard Business Review recently interviewed Garry Kasparov and something he said in the interview struck me. He seemed to make a huge emphasis on the need and importance of human qualities and specifically human intuition.  

For those of you who might not know Kasparov, let’s just say that he is a Russian chess Grandmaster, former World Chess Champion, and considered by many to be the greatest chess player of all time. 

In this interview, Kasparov argued that in today’s day and age almost everyone has access to computer processing power. Knowledge has almost been democratised. We all have access to it. Hence, ultimate competitive advantage comes from our human gifts and not technology since everyone has access to technology. 

Applying Kasparov’s argument to business, I started thinking that all managers, in reality, have access to the internet (the knowledge of everything) and/or internal ERP systems. For instance, a manager can search any management term in Google and he will have an almost infinite amount of information.

Similarly, most companies now have in place powerful ERP systems, which provide managers with a multitude of business information and analytics. In fact, I would argue that the problem isn’t a lack of information since there is arguably too much of it. The value lies in a manager who is experienced, well educated and intuitive plus can discern and judge what is relevant and important in any given situation.

This, I believe, is where the real competitive advantage lies in the business world. Therefore, I completely agree with Kasparov that the human element is fundamentally important. 

What is ‘human intuition’ after all? According to Bruce Henderson (founding management consultant of BCG) it is ‘…the subconscious integration of all the experiences, conditioning and knowledge of a lifetime, including the cultural and emotional biases of that culture...’ and that is precisely it, we as human beings have this gift to merge our knowledge with our subconscious and emerge with intuition; something computers don’t do. 

Don’t get me wrong: I am not suggesting that business decisions should be based on gut feeling alone, since this would be a regression in our evolution of business management practices. I also consider it poor practice when managers use their gut feeling to make decisions instead of first embarking on fact finding and analysis.

In fact, when managers are lazy, time-starved and/or overwhelmed with information overload and complexity, they usually resort to gut-feeling, fuelled, decision-making. In fact, business research by Christian & Timbers reveals that 45% of corporate executives rely more on intuition than facts and figures in formulating their business decisions. 

To my mind, human intuition will always be important but only in tandem with reason and analysis; a sort of machine power plus human intuition. In business, today, ERP systems undeniably have immensely powerful data and analytical capabilities. The challenge isn’t business analytics but how good your senior managers are at using their intuition in complex and ambiguous business situations with a plethora of information bombarding them; since ‘complex’ and ‘ambiguous’ is the new norm. I therefore, believe, that this is the real measuring stick of how good your managers are and this is where the real competitive advantage resides, i.e in the quality of their judgement.

Again, please don’t take my argument too literally: human intuition is subject to all sorts of biases and flaws, most of which operate at the sub-conscious level, meaning we are not even aware of it, but I do believe that with the right blend of reason-&-analysis, plus (a well-trained) gut-feeling, managers can advise their leaders and offer good judgement. 

I also think that since the main protagonists of any business are human beings – customers and employees – and not big expensive machines or ERP systems, that it is human intuition that gives companies their competitive advantage, since this is what ultimately is unique and difficult to copy or replicate. 

Consequently, I cannot but agree with Kasparov that we shouldn’t forget or neglect the human element in everything we do and I am applying this to business: from interviewing a prospective employee, to promoting a young manager, investing in a new product or how we deal with people in general. Granted there is a way to probe, to motivate, to ask questions, to solve problems, to analyse them, etc, but the human element is the most valuable part of the equation. 

In the words of Kasparov himself, when talking about chess, although what he says can easily be applied to business management: 

‘[You need] enormous self-belief, intuition, the ability to take a risk at a critical moment and go in for a very dangerous play with counter-chances for the opponent – it is precisely these qualities that distinguish great players.’