The Role of Intuition in Business

I attended the SV2 Sprint Meeting on Tuesday night and one of the presenters made a point that has stuck with me all week, I will make my best effort to replay the moment but I will also take editorial license to paraphrase:

“We have become too metrics driven, we look for historical data to inform our future direction but historical data is a reflection on the past and ignores the value of intuition.”

The point the speaker was making is that the Silicon Valley style of management, in business and elsewhere, focused on discrete problem sets with specific solutions, coupled with modern management theory about benchmarking progress against objectives (this is the OKR framework). The challenge with this approach is that every disruptive technology advance in the Valley and beyond has come as a result of trial-and-error, intuition about changing behaviors, and a healthy dose of luck, so in essence we are pursuing a management model that is incompatible with the Silicon Valley ideal of changing the status quo of the world we live in.

To quote another Tuesday night speaker:

“Big change doesn’t come from small change.”

The emphasis on data has led to an unfortunate behavior that I also want to highlight, which is the weaponization of data, for the purpose of frustrating progress rather than enabling it. I see this play out in many conversations when specific strategy proposals bring together people with different perspectives and, ironically, intuitions about the problem set.

Rather than moving forward with imperfect information these folks will insist on more data to validate a point of view that they know is subject to a lot of interpretation and one which will unlikely be conclusive with even a massive amount of data. This is a toxic behavior in any company and the result is a frustration that develops into lost trust and isolation.

We hire smart people not just because they are skilled but also because they can exercise judgement about moving a business, or project, or philanthropic endeavor forward. If we accept iterative small change then we inherently accept mediocrity and lack of relevance because over time these turns of the crank will not add up to disruption at scale. Intuition and judgement have a role in business and using data as a foil for intuition does disservice to the individual and to the business.

There is a role for management tools, such as OKR (I use them and find immeasurable value in the technique), but I am increasingly of the mind that the devotion to discrete management measurement is incompatible with the strategy role that a management team must accomplish, and an insistence on data to make decisions can become a crutch for people who lack the confidence in their own intuition about what is often quite obvious.

With reward comes risk and the contrary is also true, without risk there is no reward.