Instinct is rooted in a primitive need to be safe. We are born with it. It doesn’t take into account intelligence, wisdom, or a risk / benefit analysis.
Intuition, on the other hand, is rooted in our experiences. It’s shaped by cause, effect, observation and reflection. You might also call it “knowing.” As in, you “know” the right thing to do.
Reflecting on his discoveries, Albert Einstein concluded there is “no logical path leading to these laws. They can be reached only by intuition, and this intuition is based on an intellectual love of the objects of the experience.”
It’s easy to confuse instinct and intuition. Both relate to
making decisions… or explaining why you feel a certain way.
In business, reliance on your instinct or your intuition can mean the difference between success and failure. This is true in careers as diverse as R&D, marketing or general management.
This paper compares and contrasts businesses that cultivate intuition with those driven by their instinct to mitigate risk and avoid failure. I argue that seeking safety is one of the riskiest things companies do, and examine why those who drift toward risk aversion struggle to grow.
WHY MOST BIG COMPANIES PLAY IT SAFE
In a way, the answer to why big companies play it safe is obvious; they have more to lose. Yet, every big company was once small and became successful because it took a chance and created something new. Once successful, though, it had to institute processes and enforce checks and balances. Over time, the culture changed to one of protecting ideas, instead of building new ones.
Most CEOs agree that “being innovative” is supposed to solve that. The problem is how to innovate. Product development efforts are often designed to mitigate risk, not discover and commercialize breakthrough ideas. In these cases, the focus is on sustaining innovation with slight improvements. This close-in bias makes a brand less competitive, and even irrelevant, over time.
Look at Sears, Kodak, Kmart or Palm to understand the risks associated with close-in innovation strategies that keep doing what they’ve always done… right up to the point of obsolescence. Sooner or later, these brands become susceptible to scrappy upstarts with truly new ideas.
There’s no way, for example, for a market leader like Pepsi or Coke to eliminate nuisances like Jones Soda or Izzy. In the scheme of things, these upstarts are tiny — a fraction of the $70 billion U.S. beverage category. Yet, they continue to grow because they are willing to be different. Jones Soda puts the pictures of consumers who have selected their new flavors on their labels and Izzy is consistently faster to market than their larger competitors.
DROWNING IN DATA
The problem with the traditional product development process is that it’s over reliant on data. There’s nothing wrong with research, the problem comes when you hide in it and no decision can be made without waves of quantitative studies. Research can weed out bad ideas early on, but it can’t tell you why an idea is bad or consistently predict a winner.
When asked to distil his book Blink to one key point, Malcom Gladwell said, “Our ability to rapidly reach a sophisticated conclusion is derailed by overloading people with information.”
Yet information overload is often the norm in large companies which clouds intuition and clear decision-making. The new GAP logo had a lot of research behind it, but not a lot of consumer insight. They couldn’t have gotten it more wrong.
One traditional research approach is the focus group. These are artificial environments where consumers can pretend to be who they aren’t. In the real world, no one spends two hours talking about a product or service they might someday buy. More importantly, we can’t understand the context around their perspective. Their families aren’t present, we have no idea what their homes are like, and don’t know how they shop or why they buy. Some of their behavior is even influenced by sub-conscious factors the consumer can’t articulate.
Most companies want innovation processes, and the research steps within them, to be logical and predictive. This adherence to security is incompatible with the fearlessness and vision needed to create, articulate and refine a winning idea. An assembly-line process is good for manufacturing products, not inventing them.
Entrepreneurial companies approach innovation differently. Neither Apple nor Google do traditional market research. For them, innovation is a byproduct of design thinking, creative intuition and real-time consumer feedback. The innovator’s diet at these companies is not research or focus groups, its inspiration, observation and passion.
Informed intuition reigns in the hyper-competitive technology sector. Here, product lifecycles are measured in months not years.
While we are all born with instinct, we cultivate our intuition. Instinct tells us to avoid risk and uncertainty, especially if the perceived cost of failing is high. This leads to sameness and, ironically, higher failure rates.
Informed intuition is a better guide. It can be found in the confidence you get from an understanding of consumer behavior and the passion of dreamers who create products that delight the user and succeed in-market.