Most successful executives I have worked with have an indefinable intuition for the business that drives their decision making. This ability presents itself in a variety of ways, but is best revealed when they are forced to make decisions for which there is no clear right direction. In those cases, the executive uses their best judgment and hopes for the best. Executives that are able to make the right judgments continue to see their firm grow, while others are left stagnant repairing the repercussions of poor decision making.
But what happens when a staffing company grows and decision making becomes more and more complex? Can intuition effectively guide decision making? While I don’t completely disregard the role of intuition, a common mistake I see owners make is to believe that their intuition is a unique gift that shouldn’t be challenged even as their operational knowledge wanes.
This perspective is often justified by the book Blink by Malcom Gladwell. In this book, Gladwell discusses rapid cognition or the thinking that happens in the first two seconds when placed in a new situation. Many people walk away from Blink with a higher regard for instincts as the key driver of decision making rather than fact based management. This is an understandable misinterpretation of Gladwell’s premise. Below is a description of the book’s premise in Malcom Gladwell’s own words.
“You could also say that it’s a book about intuition, except that I don’t like that word. In fact it never appears in Blink. Intuition strikes me as a concept we use to describe emotional reactions, gut feelings–thoughts and impressions that don’t seem entirely rational. But I think that what goes on in that first two seconds is perfectly rational. It’s thinking – it’s just thinking that moves a little faster and operates a little more mysteriously than the kind of deliberate, conscious decision-making that we usually associate with “thinking.” In Blink I’m trying to understand those two seconds. What is going on inside our heads when we engage in rapid cognition? When are snap judgments good and when are they not? What kinds of things can we do to make our powers of rapid cognition better?”
The foundation of Gladwell’s premise is not that some of us have innate abilities to make the right decision independent of facts. Instead, the premise is founded on our cognitive ability to combine our experiences and critical data to inform our immediate judgment. However, the idea that rapid cognition is independent of facts and experience is a seductive trap that is both stubborn and dangerous. For executives to avoid this trap, they must improve the effectiveness of their line level management team and provide executive management the operational insight they need to make the right decisions. Below are ideas how to make both those success factors a reality.
Manage from a Balanced Metrics Portfolio: Managers who rely on their business instincts to address business problems can spend a lot of time fixing minor problems, or providing solutions that can make matters worse. This is especially true in this rapidly changing marketplace where business practices can quickly become outdated. A balanced portfolio of metrics provides critical data to management on where the company is and where it is headed. This situational awareness combined with management expertise empowers leaders to focus on the right issues and not be distracted by ancillary problems.
Define Management Roles: Management roles are too often defined by reporting structure and not the business drivers of the role. This approach limits both direction and accountability by not defining the three key management responsibilities: Personnel (hiring, coaching, and performance management), operational improvements (process and tools), and the identification of supply and demand trends (contractor pool and buyers).
Hire and Develop Strong Managers: One of the most underestimated factors of a productive company is the strength of the line level management team. Strong managers impact all critical success factors of your operation through effective decision making, innovative solutions and motivational leadership. In addition, strong managers can provide critical insight on the feasibility of long term strategic growth plans. However, while some managers may have talent in all the above, it is executive leadership’s responsibility to encourage the development of these skills.
Make Management Meetings Meaningful: A common mistake executive’s make is to limit management meetings to a discussion around results. While discussing results is critical in driving accountability, it does little to improve operations, encourage collaboration, or provide meaningful coaching for line level managers. Management meetings are the best method to identify potential growth bottlenecks, inform executives on operational trends, and assess and develop the knowledgebase of the line level management team.
Stay Informed: From my experience, great ideas oftentimes lie dormant in manager’s minds and require challenging discussions to be clearly defined and vetted. However, staying informed on industry trends through continuous reading and active involvement in industry associations will provide additional insight to help drive effective decision making. For additional insight on how industry associations can improve management decision making, visit my blog on the importance of having a balanced perspective.
Regardless of the company size and complexity, executives can get the information they need if they are looking at the right data, driving effective collaboration with line level managers, and making an effort to stay informed of industry trends. This information empowers executive decision making and avoids mistakes that are commonly linked to uninformed intuition.