Business and intuition

We have all had them – premonitions, gut feelings, the sense that something will happen before it does, knowing something we shouldn’t well before it seems logical or sensing something happening to someone close to you that is physically far from us…

Gut feelings… a sixth sense… by whatever name, intuitions can be informative. Many swear by them.

But in the investment world, mysteriously-generated feelings more often than not lead investors to make wealth-destroying decisions. In the business arena, the same is true – very capable, smart, hard working people travel down the wrong path with often devastating consequences. Working harder and harder based on a hunch or “opinion”.

There is a better way…

Nate Silver, statistics guru extraordinaire, put a face on the value of data and — when astutely analyzed — its ability to guide decision-makers toward the most desirable outcome. His CNN blog was widely followed during the 2012 American presidential election, because his statistical models proved more accurate than anyone else’s.

A year earlier, the Hollywood hit, Moneyball (originally published as a book), introduced the world to a unique idea: A data-driven, decision-making model can successfully overcome a lack of financial resources… allowing a stats-geek baseball recruiter to beat out deep-pocketed rivals who continued to rely on subjective intuition and gut feel.

When you look back, the writing’s been on the wall for years.
But very few want to read it.

The availability of troves of data — and the computer power needed to process it — has increased substantially over the last decade.

Yet, to some, the Big Data trend is scary.

The National Security Administration (NSA) spooked the world when Edward Snowden revealed the agency’s collection of massive quantities of our personal data. (Scary!)

Target stores reportedly have the ability to predict when a woman is pregnant — based on her spending patterns — even before she knew she was! (Scarier!)

And Twitter has analyzed billions of data points to determine which days of the week, and months of the year, we’re more likely to be happy. (Odd!) Here’s a graphic showing the analysis:

Twitter - Happy Day Of Week

Twitter, Target, and the NSA aside, financial markets are chock-full of data and, therefore, the ultimate playground for investors with a bent toward quantitative analysis. They even have their own nickname – quants!

If you’ve read my blogs for any length of time, you know I ONLY make decisions when my metrics show I have an edge…

I call it Management By Metrics.

Even though I am a fan of the power of the human spirit and readily admit that running a business is a balance of art and science, I NEVER make any major business (or investment) decision based on a gut feel. I am risk averse – why take a risk when you can reduce or eliminate it with some very simple, basic math?

I realise my pure and applied science and engineering background has influenced me. I spent several years immersed in the scientific method, which involves making observations about the real world, forming hypotheses (educated guesses) as to why the observations are what they are, and designing experiments to determine whether or not the hypothesis holds true.

Surprisingly, very few people in business use this method. Anecdotally I think it’s the popular aversion to mathematics as much as it is mental laziness. I am not suggesting you need to learn multivariate statistics, but just the use of Excel and a few simple formulas can take the guesswork out of most business decisions.

As The Exponential Growth Strategist, I facilitate our Platinum Program where you can learn the skills to acquire what I call 20/20 Foresight – being able to predict the future or manifest the future you seek for yourself or your business. Founded on scientific principles, it is with reach of anyone with a basic understanding of math and a hand-held calculator.

The science is straight forward and simple – the repercussions for you and your business can be, well…. astounding.

Contact us if you want to get past your hunches and gut feeling decisions that are letting you down or keeping you up at night with worry.

One thing that is crystal clear and most “experts” agree – the volatility and uncertainty we are currently facing is NOT going away anytime soon and in fact many agree it will get a lot worse before it gets better. It is the ‘new’ way of the world, well documented and well understood. We are in a cycle that will continue to play itself out in very predictable ways – well predictable for those who know what I am talking about!

Give us a call and we’ll introduce you to very exciting and valuable concepts like this one, that will put you back in the driver’s seat of your business (and your life) so you can steer in the direction of your goals and dreams and get to your ultimate destination (achieve your ultimate outcome).

4 Responses to “Business and intuition”

  • I strongly agree that ‘management by metrics’ is critical for better decision making in many aspects of life; business, finance and health

    As an Exercise Physiologist I use metrics to demonstrate my clients improvement with there health. These metrics enable me to continually evolve a clients individually tailored exercise program which is based on how a client is responding physiologically to training.

    In the case of Diabetes clients, the sad part is they have often ignored measures of ill-health throughout their life which has lead to their diagnosis of Type 2 Diabetes.

    Brendan Rigby
    Accredited Exercise Physiologist
    Corrective Exercise Practitioner

    Inspire Fitness for Wellbeing

  • Management by metrics has been a great tool for us.
    Our graffiti removal programs are as effective as they are because we use data of suburb trends and site graffiti hot spots in order to be calculating in where we use anti-graffiti coatings and video surveillance to dramatically reduce the incidences of graffiti attack.
    This allows us to utilise our clients allocated budget money smartly and ensure we have maximum impact in managing this social problem for our clients nationally around Australia.
    Mark Mackenzie
    B. Mech Eng (hons) GAICD
    The Graffiti Eaters

  • Improvement in the mobility of the human body lies in the conditional of the muscles holding the body together and is measured in millimeters.

    The Monitoring of these metrics is critical in how we measure progress and ensure the Myotherapy muscle manipulation techniques we use are treating the correct area of the body.

    A difference in the length of the muscles from the right side of the body to the left side of 5mm can be the difference between movement with pain or no pain.

    By tapping into the metrics we get fast results for our clients in under three sessions.

    Samantha Rigby

    B.Health Sci., Ass. Dip. App. Sci-Myotherapy

    Elite Myotherapy

  • Management by metrics is definitely something we use at Paddington Pups on a day to day basis for Doggy day Care and Grooming.

    We use stats to measure numbers so we can work out just how many dogs we have come in each day and work out average amounts per week etc. We also use our gut feeling a lot, to work out which dogs will get along and prevent any squabbles or dogs that do not get along from being placed in the same pens together. Usually our gut feeling is right.

    All these things have produced  a lower than a 4% injury rate which is very low we worked this out by managing with metrics. Thats why we are Queensland’s number 1 Doggy Day Care and Grooming Centre.

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