Intuition Definition v Intuition as weak decision making

Intuition Definition v Intuition as weak decision making v Intuition as strong decision making v Intuition as a kind of skill v Self-rating of intuition v Situations that need more/less of it v

A Definition of Intuition v Intuition is using information and making judgments based on skills, rules, and/or knowledge without conscious awareness v Scientific and popular literatures span bodily reactions, feelings, pattern matching, spiritual insight, and even ESP

An Example: Ray Kroc v v v Sold paper cups for Lily-Tulip, became Midwest sales manager 1937 quit to buy sales rights to multimixer that could make six milkshakes at once 1952 Mc. Donald’s ordered 8 for one restaurant in San Bernardino; Kroc flew out to look and saw long lines Talked the brothers into letting him franchise their outlets In 1960, frustrated by his small percentage, he asked for a price on everything: $2. 7 million, excluding the original restaurant Lawyer said no. “I’m not a gambler and I didn’t have that kind of money, but my funnybone instinct kept urging me on. So I closed my office door, cussed up and down, and threw things out the window. Then I called my lawyer back and said: ‘Take it!’”

Intuition: Weak Decision Making v Intuition as the lack of rational thought v “Women’s intuition” v Intuitive experts do worse than models v Schoemaker & Russo pyramid intuition “The higher the method is on the pyramid, the more accurate, complex, and costly it tends to be. ” (1993, p. 26)

Intuition: Strong D-M Klein - pattern matching, recognition v Simon - chess masters’ memory v Dreyfuses - expertise as use of intuition for perception, action, frame, decision v Executives are paid for “judgment” v Scientists’ esthetic of “elegance” v “Analysis paralysis”, “MBA syndrome” “a foolish consistency is the hobgoblin of little minds” v

Skill, Rule, and Knowledge Klein’s recognition-primed decision model starts with “intuitive” situation assessment, evoking a “match” or “anomaly” (skill-based) v If there is no match, a deeper diagnosis is attempted based on more general if-then rules v If that fails, experts become like novices using knowledge-based general reasoning and mental simulation of potential plans (more “analytical”) v

Intuition as Part of D-M v Myers-Briggs Cognitive Styles Thinking - facts - things Sensing - short term - concrete - problem solving Feeling - people - values Intuition - long term - big picture - problem finding - risk taking

Agor’s Survey: Intuitive Ability v Top managers average 6. 5, middle/lower managers average 5. 8 v Women average 0. 6 higher than men v managers of Asian background average 0. 3 higher than managers of Caucasian background

Some Situations Induce Intuition v “Management is the art of making decisions with insufficient information” v Hammond - more cues, more redundancy, unfamiliar, presented as a whole, pictorial, little time v you are expected to decide bigger issues v success comes from distinctiveness rather than accuracy, e. g. , macroecon. forecasts

Union Bank of Switzerland Until c. 1990, top level decisions had no strategic planning function; gut feel -- “out of the stomach” v Now, quantification happens at the middle level; top level still decides by gut feel v Decisions within “silos” (run by the “ 7 Kings”) are technically quantifiable; decisions about the whole bank are (believed to be) not intuition quantifiable, e. g. , 2 silos or 1? Should we keep retail only within Switzerland? v

Job Choice Exercise v Where do attributes come from? - alternatives that differ (attribute-focused) - value-focused v What level of attribute? (see table) v Values must develop (cf. Schein) v How to manage tradeoffs? v When do weights matter? v Sensitivity analysis/need for more data

Your Job Choice Attributes v v v Financial: salary, benefits, risk, (bonus) Job: satisfaction, learning, leadership, autonomy, responsibility, training, (creativity, fit to values, challenge, creating value, variety, control, power) Context: culture, type of business, size, working conditions, diversity, socializing, (coworkers, dress code, open door, loyalty, teamwork, similarity) Career: promotion, stability of employer, (prestige, raises, exposure, market share, security, mentor) Personal: location, hours, stress, travel, commute, living expenses, dating possibilities, (schedule, quality of life, flexibility, office size)

More on Job Choice Exercise Most (but not all) trust the intuitive model, and try to adjust the linear models to agree – trust, but verify (intuition is not perfect) v Does using intuition first bias the model? v Weight ranges varied greatly v Weights may be hidden in attribute ratings v What would you do if this really mattered? v Modeling for learning, not for choice! – how to develop intuition v

We Are What We Choose To Do v “It is our choices, Harry, that show what we truly are, far more than our abilities” Professor Dumbledore J. K. Rowling, Harry Potter and the Chamber of Secrets, 1999, p. 333.

Schein’s Career Anchors v v v v Self-perceptions of motives, skills, and values that you would not trade off, that solidify with work experience: Technical/Functional Competence Managerial Competence Autonomy/Independence Security/Stability Service/Dedication Challenge Entrepreneurship Life-Style Integration

A Personal Mission Statement Just as companies create mission statements and the US founders wrote a Declaration of Independence, individuals become self-aware through articulation of and reflection on their own goals and values v This is not something to do in a few minutes, but a serious project that should be reviewed from time to time v The superior man seeks what is right; the inferior one, what is profitable. - Confucius v

Instrumental & Terminal Values v Take one of the important attributes from exercise #1, such as “salary” v Why do I want this? v Why? v Try to ask yourself “why? ” 6 times! v When you get to things desired for their own sake, you have found “terminal values”

Begin With the End in Mind from Stephen Covey, 7 Habits v v v Find a quiet spot to reflect for awhile and clear your mind Imagine you are going to the funeral of a loved one. As you walk inside you see the flowers and hear the music. Family and friends are there. As you walk down the aisle to look in the casket, you come face to face with yourself. This is your funeral, three years from now. As you wait for services to begin, you look at the program. There are four speakers: one from your family, one from your friends, one from your work or profession, and one from your church or community. What would you like each of these speakers to say about you and your life? Look at the people around you; what difference would you like to have made?