Monday, October 8, 2007

Go with your gut

Businesses can too often be held back by their absolute determination to be rational about decision making. How do I know this? Simple, my gut tells me. Now, I’m not suggesting that CEOs hold weekly séances or use divining rods to search out opportunities, but I am suggesting that intuition, gut feeling and instinct need to be taken far more seriously than they are. I am astonished that some people (and they are not all economists) still believe that consumer decisions are rational and not emotional. Yet here are two more compelling reasons why this is just not so; one from an English philosopher and the other from a German psychologist.

The English philosopher is John Gray, and in his book Straw Dogs he calculates that “we process perhaps 14 million bits of information per second” and that “the bandwidth of consciousness is around 18 bits”. 14 billion v 18. It’s extraordinary that we pick up anything from anyone. It’s certainly no wonder the tedious listings of benefits on packaging make so few connections with shoppers. Instead of lecturing them, how about attracting them with something they can get fast?
The German psychologist is Gerd Gigerenzer. Malcolm Gladwell used Gigerenzer’s research in Blink to show how snap decisions often get better results than careful analysis. In his own book, Gut Feelings: The Intelligence of the Unconscious, Dr Gigerenzer shows how we do it. Our unconscious sifts through a huge range of rules-of-thumb we have already processed and, virtually instantaneously, makes a decision based on this past wisdom. The best part is that these intuitive feelings lead to high quality decisions, or decisions we are happy about later. Gut Feelings demonstrates that emotion, intuition, speed and the right answer are not as far apart as many people think.

8 comments:

Susan Plunkett said...

I think instinct greatly underestimated. I have struggled to run on instinct but more and more I have to note that my instinct is usually very sound in terms of whether an outcome will be positive or problematic. It can be very satisfying having your instinct affirmed.

I'm not in entire agreement with you Kevin on the rational vs emotional debate. Reminds me of nature/nuture.
I don't see why the rational and emotional have to be mutually exclusive. And I would argue that it makes no sense to snip the umbilical cord that links the two against the fact that people respond as layered beings; we *are* layered beings.I am entirely capable of moving through intellect-emotion-intellect-instinct-emotion moments and I believe many people are like this.

I would also add the pragmatic that often the less money you have the more profound a purchase is. If you make an error and buy a washing machine that doesn't do the job then you may not be in the position of responding in an entirely philosophical way. You're stuck with the ruddy machine, so you then learn to care about lists on packaging. Not caring tends to be a luxury.

Susan Plunkett said...

Kevin, Again to that 'rational/emotional' wrestle.

On the Lovemark Profiler you talk about Commitment as a function of Intimacy:

http://www.lovemarks.com/index.php?pageID=20031

Depending on the answers there, and the context, it may be a 'best' decision to allow the rational to shine through the emotion. For example, I think many of us have remained loyal to a business that is iconic or long standing and who is struggling. We might even buy a few things we don't need in order to try and sustain their business. However, their undoubtedly comes a time when one is faced with the potential of cheaper or broader range or other benefits elsewhere.

I guess I'm suggesting you are really accommodating the rational viewpoint.

Piotr Jakubowski said...

I love the simplicity of this idea. 18 bits vs. 14 million bits.

Based on Gigerenzer's research, why would we place so much emphasis on the concepts of knowledge and wisdom with age, when people don't really take advantage of it?

It seems that wisdom is based on the ability of individuals to make the best decision, not the most rational or the "right" decision.

Not to sound philosophical, but what is a "right" decision? And how can people justify decisions that may not seem "right", but over time end up to be the correct ones?

Steve Harper said...

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Ripple On!!!

Steve Harper

Josephine said...

This is not going to be the most sophisticated comment but as KR would say it's one from the heart.

Intuition first led me to lovemarks, my sister told me all about this man called KR. I found the lovemarks site and for some reason it just engaged me. I never realised before then that there have been very few times in my life when I have actually listened to what that gut has been telling me-be it about how I conduct myself, my actions or how to know what is right or wrong.
So my intution said early on, study this man and this company and see where it leads.

I discovered that I love brands and lovemarks and anything at all with giving consumers great experiences-in a nut shell I love making people happy and I love being creative-thank you to lovemarks for helping me to discover that.

It's taken me a while to start to focus but I'm glad I listened to that intuition in me for once.
Listening to it made me learn through KR blog about the 4 agreements, it helped me to go apologise to a few people for things I had done seriously wrong, it helped me to look at the importance of building relationships, trust and reputations, listening to my intuition has also helped me to connect to people like Piotr, Susan and Andy Drish- to read about wisdom, learning and responsibility through their blogs and following my intuition helped me to realise how inauthentic I had been before I started trying to learn. I had read so many books on how to be successful, how to be a wise guy, how to be a tough guy that I didn't actually realise that I was losing authenticity.
So suddenly my gut has led me to brands, saatchi, KR, Bob Isherwood and I have this whole new world, where I am looking at my values, trying not to have too much concern if I'm not the smartest person or the most successful but I have gained some values, some integrity and am learning what it means to be responsible as well as keeping my word and what it means to find happiness.
Following my intuition and gut is transforming my life.
Thanks to KR and all the other guys and their great blogs

Josephine

Kevin Roberts said...

Susan – I hear what you’re saying. We are layered, it’s shades of gray not black and white. Some people will make entirely rational decisions, some will make entirely emotional decisions, and most will be in between. We base our decisions on many factors, including - income, what your parents did, what your friends do, the type of product, and price. The thing is that while people are aware of their rational side, they still most often make decisions based on their emotional response…whether they are aware of this or not. Think about two different products, it’s the first time you’ve bought this type of product, they have exactly the same benefits, same price, same size etc etc. You will probably buy the one that you can connect with emotionally - what’s on the packaging, brand colors, or most memorable TV ad etc. Emotion is what swings the balance.

Kevin Roberts said...

Piotr – I think the best way to answer this is to say that yes, going with your gut may lead you down the wrong path to start with, but it’s likely that you’ll be closer to the target than if you had spent large amounts of time second guessing, analyzing, and formulating at the start. Fail Fast, Fix Fast. The idea is that most of the time, in most situations, the decisions you make using your instincts will give a better end result than decisions made using metrics, analysis, processes, research, opinions, second guesses…

Susan Plunkett said...

This is a fascinating discussion Kevin. I find I weave in and out of agreement with you - which for me is pleasant by the way.

You said "Emotion is what swings the balance."

I'm not sure I can agree with you IF.. I say.. if.. :) by emotion you mean what is generated via sensuality, intimacy and mystery.

Example. Ringing round to compare insurance quotes. Some phone staff are a little pushy - you can feel yourself awarding negative points for manner, approach and then for issues like an overly complex contact schema and so on. However, I looked across my activity and my selection process and realised that what I felt best with in THIS context (a pragmatic 'purchase') was feeling assured, comfortable and knowledgeable balanced by cost. To obtain the first three criteria I am prepared to pay a little more.

Undoubtedly those 3 criteria are also emotion based. I wouldn't argue that Kevin. However, I don't believe sensuality and mystery - particularly mystery - play roles in such circumstances. I do on the other hand believe intimacy, however you define it, serves just about doggone every situation in one way or another :)

My point simply - Lovemarks can cover other zones of emotion so consider adding 'assured' - or similar - to your list?

Thanks for the fulsome response you offered us on this topic by the way. Cheers :)