Australian Diamond Trading Corporation
advertisement
Australian Diamond Trading Corporation
advertisement
Australian Diamond Trading Corporation
advertisement
Goto your account
Search Stories by: 
and/or
 

Management













A decision may ‘feel’ right, but it can’t be made without a factual basis.
A decision may ‘feel’ right, but it can’t be made without a factual basis.

Relying on gut instinct is not enough when building your retail strategy

BRIAN WALKER explores the powers – and limitations – of intuition when it comes to managing a retail business and how experience interacts with data.

The late economist, businessman, and governor of the US Federal Reserve Robert Heller had a saying, “Never ignore a gut feeling, but never believe that it’s enough.”

Recently, I witnessed a senior retail business leader talking through their business’ strategy, its positioning and product deployment, describing how this had been conceived from the‘gut’–this individual’s intuition.

In other words, it was their experience and instincts that led them to deliver such a well–crafted set of opinions, as well as the company’s operating strategy over a three–year timespan.

The comment made me wonder about how reliable gut instinct really is in decision- making – and, in this retail business leader’s case, very important decisions!

These decisions often require investment capital, intensive use of resources, and more often than not, radical approaches.

How could a company’s board of directors endorse a strategy formed without independent insights, research and counterbalance? I wasn’t sure, although many have and still do.

Over the years, retail CEOs have had to navigate a minefield of critical decisions; many of them ‘felt’ right, but were strategically flammable.

Think of the department store that expanded its bricks-and-mortar presence when the world was fast discovering internet, or the retail group that spent too much on acquisitions of other businesses and exploded its balance sheet.

Naturally, what comes next is to ask, in this rapidly changing landscape, how we can rely on our ‘gut’ to predict the future.

Searching for a strategy
The reason successful, creative entrepreneurs, particularly those that have been in their industries for a long time, are often known to have great instincts is because they simply have a deeper well of experience to draw from.

In his book Intuition At Work, author Gary Klein expresses the common – and probably flawed – wisdom that intuition is “at the centre of the decision-making process” and that analysis is, at best, “a supporting tool for making intuitive decisions.”

Detached from rigorous analysis, intuition is a fickle and undependable guide; it is as likely to lead to disaster as to success.

And while some have argued that intuition becomes more valuable in highly complex and changeable environments, the opposite is actually true.

Making great decisions ‘from the gut’ has been emblematic of leaders in the past
– there are business fables assigned to these moments – yet the reality is that they are very much few and far between.

In fact, exceptional instinct is a superpower that only superheroes truly possess.
As Ralph Lauren, former CEO of international pharmaceutical conglomerate Johnson & Johnson, said, “Very often, people will do a brilliant job up through the middle
management levels, where it’s very heavily quantitative in terms of the decision-making.

“But then they reach senior management, where the problems get more complex and ambiguous, and we discover that their judgment or intuition is not what it should be.”

Complexity and ambiguity are absolutely the hallmarks of the environment we live in today, and the human brain is “wired to see patterns in the information our senses take n,” explains US biology professor Jeanne Hardy.

Hardy observes that most of this takes place in the subconscious, which forms “95 per cent of our brain activity”.

“When we subconsciously process patterns, our body produces neurochemicals that trigger both the brain and gut.This is how our intuition is formed and why we get the sensation that something ‘feels’ right or wrong,” she says.

According to Hardy, intuition is formed from two aspects – current senses, or the information our brain is processing when the ‘gut feeling’ kicks in, as well as memories stored in the brain.

She posits that the reason successful, creative entrepreneurs, particularly those that have been in their industries for a long time, are often known to have great instincts is because they simply have a deeper well of experience to draw from.

This sums up determining the role of the ‘limbic’ – or instinctive – approach to strategy formation and the insights that years of experience bring to the table.

Similarly, on the consumer side, intuition isn’t just a random collection of feelings that happen when you’re exposed to a particular product or brand.

Often, these emotional responses are informed by previous experiences, ideas, and memories.

In summary, a seasoned executive who has worked in the same sector for many years, and has therefore acquired ingrained learnings, experiences and relevant thinking, can largely rely on their instincts – so long as this is supported by data.

Trust me, I have an intuition for these matters!

 

read emag











ABOUT THE AUTHOR
Brian Walker

Contributor • Retail Doctor Group


Brian Walker is the founder and managing director of Retail Doctor Group, a retail consulting company. Visit: retaildoctor.com.au

RAS (Time Supply)
advertisement





Read current issue

login to my account
Username: Password:
Jeweller Magazine
advertisement
Duraflex Group Australia
advertisement
Classique Watches
advertisement
© 2021 Befindan Media