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Managing Through Intuition
Managing Through Intuition
Managing Through Intuition
Managing Through Intuition
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Managing Through Intuition

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  • 1. Businessworld : Number one Indian business portal with incisive analysis and surveys - ... Page 1 of 4 Book: Winning Way With Numbers Opinion: Confusion All The Way In fiction, the idea of a mathematical or Buying grains cheap from farmers and statistical formula to predict surefire... selling them cheap to the poor creates... BW Home Books and Guides Managing Through News Update Intuition My BW Advertise Go Login User Name search... Lost Password? Register With Us REVIEW bank jobs in india Managing Through Intuition News & Articles Apply for Jobs Conversations Now. Submit your AUTHORSPEAK/R. GOPALAKRISHNAN Resume Free. Placements Now! Biz Campus Buzz MonsterIndia.com Columns Just as artificial constriction can cause a plant to develop into a bonsai, so too Home MBA Prep it is with managers. A bonsai manager is one whose growth has not run the Magazine Events Calendar natural course because he has failed to draw sustenance from his natural Articles Speak Out India Wins Nehru environment. The consequence is inadequate intuition. As a result, bonsai Cup Blogs Best B-schools in managers are not able to work at their full potential. To achieve that, Start of a New Era Web Exclusives India managers should explore new vistas of their being, drawing on their innate in Football Find In The News Study Abroad genius. Intuition will be a key differentiator for excellence in the future, more news, scores, BW Opinion Special so than in the past. photos & more Columns MBA FAQs www.aol.in/sports BW-Leadership Several years ago, as a young, travelling sales manager in Hindustan Lever, I Interviews spent the night at a forest rest house at Dandeli. This little town nestles in a Surveys picturesque part of the Western Ghats in northern Karnataka. As I settled Blogs ICICI direct क साथ े Charts and Reports down to sleep, I began to notice the sheer variety of sounds in this quiet place Categories शेर बाजार मे Deal Tracker — a series of clicks, buzzes, shrieks, whistles, croaks and caws—that I had General (1) ओनलाइन इ वेःट Cases never heard in the city. I developed a naïve curiosity about the world of करे आज ह . Entrepreneurship & Books and Guides animals and insects. This curiosity caused me to collect facts about nature Venture Capital (11) ICICIdirect.com Events little-known to lay people. I learnt that such communication methods among Media & Entertainment BW-Plus birds, animals and insects constitute an amazing language system. (1) Archive Telecom (1) Press Release Free Investment About a decade ago, I started to see a curious connection between such facts Business of Sports (3) Advice. Subscribe BW from nature and anecdotes from my professional career as a manager. I began Pharma & Healthcare New To Investing Photo Gallery to share these ‘nature-and-management’ stories at in-company training (8) In Shares? Let Our courses. Encouraged by a positive reception, I gradually expanded the Internet & Telecom (3) Experienced And audience to include outsiders, that is, management associations, students and Easy Guide Help Business Beat (0) You managers in other companies. Archives www.Sharekhan.com/Inve 2007 (2) 2007 (5) 2007 (8) 2007 (6) 2007 (6) Where the two circles — nature and management — intersect, lessons on intuition can be born. Using anecdotes about a vast array of living creatures, and my own experiences in the world of business, I feel that managers should let their gut and instinct guide them after all the analysis has been done and when faced with difficult decisions. Why, when imported into China from Thailand, did crocodiles lose their sex drive? What was the purpose behind the Arab bonding with his falcon all day long? How do squirrel gangs scare off snakes? Why are grizzly bear cubs trained for two years to hook salmon? There is a management lesson in each of these endearing stories from the animal kingdom. Future managers will face vastly different challenges as the world around them changes dramatically. In this world, the inclusive, intuitive and humane style of management will work, not the top-down approach. Increasingly, managers work under a great deal of pressure to perform. As a result, they often do not consciously separate the problem at hand into ‘technical’ and http://www.businessworld.in/content/view/1766/1827/ 25-Sep-07
  • 2. Businessworld : Number one Indian business portal with incisive analysis and surveys - ... Page 2 of 4 ‘human’ categories. Pressured with performance targets, modern managers quickly analyse a situation, identify the issues and problems, and plunge headlong into the implementation of their solutions. In the process, they generate and receive masses of data to acquire all the rational opinions and analytical information available. But, after all the analysis has been done, it is often on the basis of unclear data that their mind is still to filter that a decision hinges. * Should we or should we not acquire that company? * When everybody advises against this project, should we persist or abandon? * Will posterity see me as the idiosyncratic genius who ploughed a lone furrow or as a huge disaster? * Is the entry into this new line of business an act of folly or foresight? Intuition At Work Business history and entrepreneurship is full of stories about leaders who trusted their intuition after exhausting their powers of analysis. The great Indian industrialist of the nineteenth century, Jamsetji Tata, had bought some marshy land near the Nagpur railway station in 1874 at a low price. He floated a company called The Central India Spinning, Weaving and Manufacturing Company. When asked to subscribe to its shares, a local Marwari banker refused to invest in support of ‘a man who was wasting gold by sinking it into the ground.’ This person later admitted that Tata had put earth into the ground and pulled out gold. Authorspeak/R. Gopalakrishnan R. Gopalakrishnan has been a professional manager for 40 years, of which 31 years were with Hindustan Lever. He began his career as a computer analyst with HLL and worked in marketing before moving to general management. During his years with Unilever, he worked as chairman of Unilever Arabia, based in Jeddah. He was later appointed managing director of Brooke Bond Lipton. After the company’s merger with HLL, he was designated vice-chairman of HLL. Gopalakrishnan joined Tata Sons in 1998 where he is executive director. He also serves on boards of other companies. This article is based on his just released book, The Case of the Bonsai Manager In the late 1980s, ignoring all the market research evidence, Bob Lutz, then president of Chrysler, went ahead with the Dodge Viper car model. This was an outrageously powerful, eye-searing roadster launched at a time when Chrysler was down and out. Bob Lutz felt that the company had to take a lot of chances because it would go out of business if it did not. So he did a lot by intuition and ‘cut out all the crap normally associated with a new product.’ Similarly, in the 1950s, Brooke Bond, the leading tea company, wanted to sell to the lower income consumer. After reducing packaging and other costs, their sales people made an intuitive observation—lower income households did not have cooking gas at home, so lighting the kitchen fire meant wood or coal. That meant a lot of effort and cost just to boil some water for tea. Hence, the men went away early in the morning to the nearest ‘hot tea shop’ (HTS in Brooke Bond terminology) to enjoy a ready-made cup of tea. The cost per sip was higher than homemade tea, but it made sense to the consumer. Based on this intuition, Brooke Bond developed their HTS distribution system—and it was to stand them in good stead for decades. In the 1970s, international companies were targeting lower income customers to use shampoo to wash their hair. Their market research and logical analysis confirmed that the price was too high. So their effort was to reduce the price per litre, principally by focusing on achieving lower packaging costs. An entrepreneur, trusting his instincts, figured that the cost per litre was not relevant; the unit price was the key factor. He launched a sachet of a few millilitres of shampoo for single wash at Rs 2 per sachet. The cost per litre of this product was higher than the bottles, but the unit price was affordable. Velvette shampoo captured the market; soon others followed. All the above decision turned out to be great ones. Nobody has a magic formula to develop intuition, but is there a common thread? Knowledge, Intuition And Wisdom http://www.businessworld.in/content/view/1766/1827/ 25-Sep-07
  • 3. Businessworld : Number one Indian business portal with incisive analysis and surveys - ... Page 3 of 4 Knowledge is what you know you know. Knowledge can be taught, and you can acquire it from external sources. Intuition is what you do not know you know. It cannot be taught, you learn it on your own. At the core of intuition is a set of understandings that the owner just does not know about. When knowledge is integrated with intuition, it becomes wisdom. The value of intuition increases as a person rises in the organisation and finds that he has to solve more complex issues. Senior leaders are, in fact, paid for their intuition, their knowledge is taken as a given. The absence of intuition at crucial times is one of the reasons for the surprising failure of top leaders, who have established a reputation of success already. In the practical world of the manager, human ambition, motivation, and social relations play a very important role. Intuition does not just ‘happen’, it can be developed. There are six simple messages: Intuition does exist and it is very important for the manager, especially at the more senior levels of leadership Analysis and intuition are not substitutes, they are complementary. A manager can develop intuition by viewing issues holistically, with the ’surrounds’ of the issues, and not in isolation. He should observe and learn from the peripherals of his vision, hearing, experiences and relationships. The manager’s intuition is enhanced through varied experiences and relationships, contemplation and reflection A manager can develop his intuition by exploring and sensing beyond what is visible and audible The leader needs to think about issues at the ‘edges of the spectrum of the obvious.’ BROWSING Pramod Jajoo MD, XORA I am reading The Undercover Economist by Tim Harford. It demystifies economics and presents its forces and effects in our day-to-day life. I liked the author’s lucid insights on perfect markets, game theory, pricing strategy, globalisation and corruption. I had previously read and enjoyed, Steve Levitt’s Freakonomics. Harford’s book was highly recommended by Levitt and that added to the thrill of picking up this book. I mostly read non-fiction, management related, self-help or money matters and India-related economic books as well. I buy them based on recommendation from friends, Amazon.com and The New York Times bestseller list. I also browse through my favourite bookstores. ALERT Watch This, Listen Up, Click Here By David Verklin and Bernice Kanner (Wiley) The tagline, ‘Inside the 300 Billion Dollar Business Behind the Media You Constantly Consume’, sounds like a mismatch. Read the book and you will feel differently. Written in 17 chapters with funky titles like ‘Why outdoor companies pray for traffic jams’, ‘Why Oprah gives away Pontiacs’, this guidebook explains how media, marketing and advertising companies work. Authors Verklin and the late Kanner have traced recent trends and if you are the sort who follows the subject, this book is for you. Comments Add New Search Write comment Name: http://www.businessworld.in/content/view/1766/1827/ 25-Sep-07
  • 4. Businessworld : Number one Indian business portal with incisive analysis and surveys - ... Page 4 of 4 Title: -color- -size- UBBCode: Send Mastering The Wind The Underdog The Rain Maker How To Tackle Reasoning The Red Shift BCCI’s Yorker A Nose For Money Acquiring Abroad? Cross-Border M&A Summit October 25, 2007 - Mumbai www.ventureintelligence.in Ads by Google Advertise on this site About Us | Careers | Feedback | Contact Us | Disclaimer | Privacy Policy | Subscribe BW | Advertise With US An ABP Pvt Ltd Publication Copyright © All rights reserved. http://www.businessworld.in/content/view/1766/1827/ 25-Sep-07

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