Tag: business

The gut is sometimes more reliable than the mind.
By Ryan Long

The gut is sometimes more reliable than the mind.

As reported in U.S. Rolled Dice in Bin Laden Raid, the green light to eliminate Mr. Osama Bin Laden eventually came down to “gut instinct.” While we all understand the role of numbers and rational thought in business decision making, we think that the West sometimes places too little emphasis on what can oftentimes be your best friend in uncertain times: your gut.

As we all know, there are times in business when the numbers tell the whole story. There is no gray area. There is no need to use your intuition to make a decision. And yet many decisions in business are not so black and white. For one thing, the numbers may be cooked by the seller of the stock you are thinking about buying. You may not know this by looking at the numbers, but may intuit it by feeling out the underwriter or broker. Like the Navy SEALS in the picture to the left, your eyes may not see anything behind those trees in your midst, but sometimes your intuition will tell you something is lurking there. Unfortunately, the West sometimes places too much emphasis on rational thought, and not enough on the value of intuition, a point that Mr. Nassim Nicholas Taleb makes in The Black Swan: The Impact of the Highly Improbable. Perhaps this is because of a reductionistic approach to studying decision making taught by many schools in the West, including the Economics Department at the University of Chicago, which oftentimes attempts to reduce the complexity of human decision making into mathematical equations. While this may be a helpful crude tool to understand a complex system, it is is not sufficient. Due consideration also needs to be placed on the role of intuition — the gut — in making good decisions.

If it ain’t broke, don’t fix it?
By Ryan Long

If it ain’t broke, don’t fix it?

There is the old saying that, “if it ain’t broke, don’t fix it.”    But Harvard Business School (“HBS”) professors Francesca Gino and Gary P. Pisano rightly point out in their article, Why Leaders Don’t Learn From Success, that successful businesses often appear not to be broken, only to find out that they are when it is too late.

When things are going well with your business, you often let your guard down. You think that things are going well because you are doing something right. But the HBS professors explain in their article that your success may be due to factors including fortuitous market conditions or beginner’s luck, as was the case with the rookie Ducati Corse racing team who won third place in the Grand Prix in 2003. You don’t question your strategy as much when things are going well. The Ducati team changed the design of their racing bike thinking it would improve performance in 2004, but the hasty changes left them in third place. It was only then that they realized the errors of their ways. Like with others, the authors write, the team learned only went things bad. The problem is that when things go bad, it may be too late. Another competitor may have already wooed your major client away. In short, its good to take the time to learn from your successes rather than waiting for a crushing defeat to wake up from what you realize was a slumbering false sense of security.