August 2009

The McDonaldisation trap: how managers can benefit from intuition

R Gopalakrishnan, executive director, Tata Sons, reflects on this integral aspect of management and its role in the changing global scenario

R Gopalakrishnan
By its very nature, truth is contradictory. After Lord Krishna ‘clarified’ everything to Arjuna through 18 chapters, Arjuna was confused by the contradictions. Krishna’s final advice was, “Reflect on all that I have said and do whatever is best.” In other words, use your intuition!
 
As the global economy hesitantly bids farewell to the bottom of markets, it finds it is unclear whether to say welcome to an upturn. At such inflection points, managers seek quick fixes for their daily contradictions by emulating well-publicised success stories. The truth is that each success story has a context: a unique background, employees’ motivations, and many other ‘surround factors’ that deeply influence the outcomes. For sure, some factors are correlated with the success. The causality (one causing the other) cannot be assumed.
 
Transplanting theories from one situation to another leads to a McDonaldisation of management.
 
Stanford professors Jeffrey Pfeffer and Robert Sutton were convinced that managers can practice their craft more effectively if they “relentlessly seek new knowledge and insight”. Two years ago they had advocated the conscientious, explicit and judicious use of current best evidence in making decisions. They advised, “It’s time to start an evidence-based movement in the ranks of managers…If doctors practiced medicine like many companies practice management, there would be more unnecessarily sick or dead patients…”
 
So does seeking evidence and new knowledge contradict reliance on one’s experience and intuition? Top managers rely on analysis and data, but ultimately, they are guided by their intuition. Beyond a point, due to constraints of time, cost or technique, the leader has to take a final call intuitively. A survey points out that almost half of corporate executives were found to use intuition more than formal analysis to run their companies!
 
There are over 200,000 business books in print and another 10,000 are added each year. That is a lot of business books. For sure, all of them cannot have something new to say. That is why operating managers are wary of business books and many feel that they are not useful. Many successful managers have no inclination to read management books; indeed they feel that books purvey fads.
 
Managerial intuition is not about to be discarded. But how is intuition to be developed by the practicing manager? The answer: reading causes immersion and openness, which can lead to contemplation and reflection; it is these that develop managerial intuition.
 
Knowledge is what you know you know. Knowledge can be taught, you can acquire it from external sources.
 
Intuition is what you do not know you know. Intuition is what cannot be taught, you learn it on your own.
 
When knowledge is integrated with intuition, it becomes wisdom.
 
Both knowledge and intuition are valuable for leaders in the decision-making process. People think of analysis and intuition to be polar opposites. Analysis is not an alternative to intuition; rather the two work well together.
 
ImOpCoRe
The word ‘intuition’ stems from the Latin word, in-tuir, which means ‘looking, regarding or knowing from within’.
 
The concept of ‘practical intelligence’ has been written about by three academics — R J Steinberg, R K Wagner and W M Williams. Practical Intelligence is the ability to be ‘street smart’ and refers to being able to understand and deal with judgmental tasks in the real and complex world. The authors also state that ‘psychological literature has lacked a coherent overarching conceptual framework in which to place intuition’.
 
These ideas appeal to me. Intuition is enhanced through Immersion, Openness, Contemplation and Reflection (ImOpCoRe for short). These ideas are supported by research that suggests that there are some things that are difficult to teach and that have to be learnt by the person through ImOpCoRe.
 
A notional part of the brain is called the brain’s remote implicit memory. Deeply emotional experiences get stored there automatically, irrespective of whether they were positive or negative emotional experiences. These would be available to call up whenever the brain saw any pattern for which it considered such an experience relevant.
 
The Economist of August 4, 2007 reported research findings about the secretion of adrenaline whenever a person experienced deeply emotional events. This adrenaline stimulates another ‘juice’ (called by technical people as 2B adrenoceptor). This ‘juice’ provides the episode ‘a fast lane into the memory bank’. For managers, analysis and contemplation are both important.
 
How can managers contemplate? Contemplate on the ‘surrounds’. While reading, our natural tendency is to focus on the subject, to absorb and analyse it, but not what surrounds it. 
 
For example, those of us who have read War and Peace remember clearly the lives of the five featured families, who go through birth, childhood, marriage and so on. Less clear in the memory would be the backdrop of events, which was set in the Europe of 1805 to 1820.
 
That is why the surrounds are what the contemplation should be about. Expressed differently, the contemplation should be not just about the rose, but its soil-bed as well. In this manner, true value is extracted out of the act of reflecting — on how the success or failure happened, and becoming sensitive to the context in which things worked or did not.
 
Often leaders and managers fail to do this. If they could do so consciously, then the value from the reading and contemplation will enter their implicit memory, sharpening their intuition. Surely that has a value!
 
Increasingly management is becoming an attractive career. There is a bewildering amount of knowledge available through seminars, magazines and books, as also an expanding tribe of gurus.
 
As managers adjust to the volatility of market swings and uncertainties, it is more important than ever to immerse themselves in management thinking and knowledge. Managers intuitively sift the bad out from the good by conscious contemplation on the ‘surrounds’ of events, both successful and unsuccessful. In doing so, they will find themselves not only more sophisticated consumers of management literature, but also at the forefront of integrating theory with practice.
 
The author is executive director, Tata Sons. Some of these ideas appear in the latest 2009 edition of his book, The Case of the Bonsai Manager, published by Penguin India.