Category Archives: Books & Articles

Intuitive Decision-Making: How Google Bought YouTube

How does an analytic company like Google make its
most important
decisions?

 If we are to believe the Google myth, we learn,
first and foremost,
that they test everything:

We test everything at Google. While Read More

Sustainability: Bill Gates Gets It Wrong?

Hats off to Grist‘s David Roberts for putting together a thought-provoking line of thinking in Why Bill Gates is wrong. And no, he’s not talking about Bing.

At the core, Roberts challenges the hubris of viewing all society’s problems through the lens of innovation.  Read More

The Strategic Role of Human Resources in the New Economy

A while back, I published a short article on the strategic role of Human Resources in the new economy.  The article: Le rôle stratégique des DRH dans les 10 ans à venir is in French, but since I get so many requests to talk about this issue, I’ve translated it here for you.  The main point I’m making is that in today’s disruptive economic climate, HR can and must become a critical differentiator.

The strategic role of Human Resources in the coming years

To generate creative added value is one of the surest ways for companies to win in the global competition today. Innovation is the new imperative. Read More

Les Echos: Les neurosciences au service de l’entreprise

A short article in Les Echos:

Les-Echos-13-08-2009.gif

Translated:

Another way to manage and lead
Neurosciences in the service of business

Francis Cholle author of L’Intelligence Intuitive recommends to executives to combine their analytical mind with their intuitive aptitudes to gain further consumer insight and improve business performance.

From our correspondent in the Sillicon Valley, Laetitia Mailhes

For beauty and fashion executives time has come to reconsider every aspect of business. “The economy is changing consumers’ behaviors, independently from the evolution of incomes, explains NY Fashion Institute of Technology Professor Stephan Kanlian. To open their wallet consumers today want more than brand prestige. They demand more and more added value and a greater match between products they buy and their own values.” But the business community is not well prepared to adapt to such a radical change.

“Obsession for financial return has led leaders to often forget they share a common humanity with consumers,” says Francis Cholle, author of L’Intelligence Intuitive, innovation consultant for large corporations and advisor to their C-Level executives. A graduate of the best European business school, HEC (Ecoles des Hautes Commerciales) Francis Cholle insists that sustainable value creation requires the necessary synergy between analysis and ROI on the one hand and play and instinct, on the other (see graph below of The Intuitive Compass™).

intuitivecompass.gif

The role of intuitive intelligence

“Neuroscience showed in 2005 that parts of our brain traditionally associated with our instinct are involved in our most sophisticated decisions” says our expert in reference to MIT Picower Institute for Learning and Memory research on our reptilian brain aka instinctual brain, published in the  scientific journal Nature. “It is very noticeable in consumer behaviors. For this exact reason if a company wants to understand its market and meet its expectations, it is necessary that they  understand how intuition works and integrate an intuitive process in their business approach,” adds Francis Cholle. His message is well received. “My daily conversations with Francis Cholle greatly deepen my thinking at a particularly critical time for our company” says Ralph Lauren Fragrances and Beauty President Guillaume de Lesquen, based in New York to orchestrate the brand development on the world stage.

Long before the economic recession Francis Cholle started to advocate the role of intuitive aptitudes and their impact on value creation. Biotherm for Men global marketing director, Charles Haddad is quite satisfied that he could attend one of Francis Cholle’s seminar and acquire tools that explain in a simple language many key aspects of brand development and marketing that he could confusedly feel but could not clearly understand even less so replicate. Today Charles Haddad  encourages in his team ” free and spontaneous communication. We then select what we feel is relevant”. “It is not about leaving behind our marketing objectives but rather about dissolving automatic censorship mechanism often inherent to corporate structures.”

Armand de Villoutreys, CEO of Firmenich in Paris and president of Firmenich Fine Fragrance World Division, asserts that he has “learned to approach differently his leadership role in a creative corporation.” And it showed very tangible results! “We started four years ago to integrate into our management practices the principles of Intuitive Intelligence,” says the French executive. “We have been happy to see an accelerated growth of our financial results across continents well above market average.”

© Les Echos n° 20486 dated 08-13-2009 p. 06 (Authorized translation by Peter Camo)

Strategic Intuition: Lessons Learned from Iraq

Intuitive intelligence can be a matter of life and death.

In Iraq, we learn that the use of intuition by US soldiers has led to numerous close escapes. This article in the New York Times gives us a glimpse of how soldiers may use their intuitive senses to avoid danger:

“On one route sweep mission, there was a noticeable I.E.D. in the middle of the road, but it was a decoy,” said Lt. Donovan Campbell, who in 2004 led a Marine platoon for seven months of heavy fighting in Ramadi and wrote a vivid book, “Joker One,” about the experience. “The real bomb was encased in concrete, a hundred meters away, in the midst of rubble. One of my Marines spotted it. He said, ‘That block looks too symmetrical, too perfect.’ ”

These life-and-death decisions must be made instantly, with little, if
any, time for rational analysis.  And what’s more impressive, the Army
has discovered that this ability to think intuitively can be improved through training.

Time after time, the Army learns from its feet on the ground, that “the speed
with which the brain reads and interprets sensations like the feelings
in one’s own body and emotions in the body language of others is
central to avoiding imminent threats.”

Of course, intuitive intelligence is not a new idea for the Army. In COUP D’OEIL: STRATEGIC INTUITION IN ARMY PLANNING, a 2005 document produced by Strategic Studies Institute at US Army War College, we see a serious attempt to blend both analytic and intuition.

The Army views the analytic approach as follows:

Analytic decision-making approaches a problem systematically. Leaders analyze a problem, generate several possible solutions, analyze and compare them to a set of criteria, and select the best solution. The analytic approach aims to produce the optimal solution to a problem from among those solutions identified. This approach is methodical, and it serves well for decision-making in complex or unfamiliar situations by allowing the breakdown of tasks into recognizable elements. It ensures that the commander and staff consider, analyze, and evaluate all relevant factors.

It may help inexperienced leaders by giving them a methodology for their lack of experience. The analytic approach to decision-making serves well when time is available to analyze all facets affecting the problem and its solution. However, analytic decision-making consumes time and does not work well in all situations–especially during execution, where circumstances often require immediate decisions.

Intuition, on the other hand, is viewed as a “creative” approach:

Intuitive decision-making is the act of reaching a conclusion that emphasizes pattern recognition based on knowledge, judgment, experience, education, intelligence, boldness, perception, and character. This approach focuses on assessment of the situation versus comparison of multiple options. It is used when time is short, or speed of decision is important. Intuitive decision-making is faster than analytic decision-making in that it involves making decisions based on assessment of the situation rather than a comparison of multiple COAs (Courses of Action). It relies on the experienced leader’s ability to recognize the key elements and implications of a particular problem or situation, reject the impractical, and select an adequate (rather than optimal) COA.

Intuitive decision-making is especially appropriate in time-constrained conditions. It significantly speeds up decision-making. Intuitive decision-making, however, does not work well when the situation includes inexperienced leaders, complex or unfamiliar situations, or competing COAs. Additionally, substituting assessment for detailed analysis means that some implications may be overlooked. Commanders use intuitive decision-making when time is short and problems straightforward. It is usually appropriate during execution.

The Army, especially in light of Iraq, has revised their thinking. The author of the report, a Columbia Professor William Duggan shows how to reconcile analytical and intuitive methods of
decision-making by drawing on recent scientific research that brings the
two together. He applies this new research to the Army’s core methods
of analytical decision-making as found in Field Manual (FM) 5-0, Army Planning and Orders Production. The result is “strategic intuition,” which bears remarkable resemblance to von Clausewitz‘s idea of coup d’oeil in his classic work, On War.

The Columbia professor states emphatically:

This divide between analysis and intuition reflects an outmoded view of the human mind that science no longer supports. Recent advances in how the mind works have overturned the old idea that analysis and intuition are two separate functions that take place in two different parts of the brain. In the new view, analysis and intuition are so intertwined that it is impossible to sort them out. There is no good analysis without intuition, and no good intuition without analysis. They go together in all situations. Some scientists call the new model of the brain “intelligent memory,” where analysis puts elements into your brain and intuition pulls them out and combines them into action.

It is important to note that this ireport does not criticize the Army or its commanders. When strategic intuition was used as a lens to analyze Army officers in action, they tend to comment, “That’s what we do.”  The report states: Good commanders use intuitive intelligence. They treat manuals only as guides, and adapt procedures as they see fit.

And that, ladies and gentlemen, is why you need Intuitive Intelligence – it is the bridge between analysis and intuition, and it explains how we, in fact, really make decisions. Despite the limited visibility in these uncertain and turbulent times, we know that Intuitive Intelligence is the necessary strategic aptitude for decision-makers both in the Army and in the chaotic world of today’s business.

The Deloitte Big Shift Index 2009: What’s Missing?

If you have not already read “The Big Shift Index” report from The Deloitte
Center for the Edge
led by John Hagel III, John Seely
Brown
, and Lang Davison you should do so immediately.

 

This first release of the Shift Index reveals a startling fact: the return on assets (ROA) for U.S. firms has steadily fallen to almost one-quarter of 1965 levels; at the same time,  the researchers found modest improvements in labor productivity.

Grim news, indeed. The report also finds:

- The ROA performance gap between winners and losers has increased over time, with the “winners” barely maintaining previous performance levels, while the losers experience rapid deterioration in performance.

- The “topple rate,” at which big companies lose their leadership positions, has more than doubled, suggesting that “winners” have increasingly precarious positions.

- U.S. competitive intensity has more than doubled during the last 40 years.

- While the performance of U.S. firms is deteriorating, the benefits of productivity improvements appear to be captured in part by creative talent, which is experiencing greater growth in total compensation. Customers also appear to be gaining and using power as reflected in increasing customer disloyalty.

- The exponentially advancing price/performance capability of computing, storage, and bandwidth is driving an adoption rate for our new “digital infrastructure” that is two to five times faster than previous infrastructures, such as electricity and telephone networks.
                                     

The Shift
Index
 consists of three indices: Foundation, Flow, and
Impact, and 25 metrics that together quantify the stock, pace, and
implications of the shift. The index enables analysts to
anticipate changes, identify bottlenecks, and guide strategy.
Not everyone, of course, will choose to monitor the same metrics or assign them
the same weights.  Thus, the Shift Index is less a single measure and
more an informational platform that will give rise to a diversity of models
and, a stronger collective sense about the pace and nature of change,
constraints and opportunities within that system.  As constraints
fall away and opportunities increase, old configurations become unstable
and new structures emerge.

 

A number of
key ideas in the report resonated with our observations at The Human Company:


- the importance of creativity and innovation in ROA

- information “flows” over
information “stocks

- passion as a driver for higher productivity

- more and more
discriminating consumers

- consistently declining return
on assets

- increasing rate at which big companies lose their leadership
positions

- rising executive turnover tied to increasing performance pressures

 

However, I was surprised to find one element missing in their measurement model.


What’s missing? Sustainability and its impact on the economy.


 

Sustainability
is the business imperative for our time. From global-warming to competition for natural
resources, sustainability must necessarily sit at the core of any sound
business strategy. The sooner businesses understand this the better.


Organizations will have no choice but to
follow government regulations and anticipate consumers reactions and merciless
communication via ever more powerful social networks aiming at securing a
healthy future.


More importantly employers who align their
businesses to create a more sustainable world will also attract, retain and
empower more and better employees. Sustainability challenges have become so
pressing that they 
not only affect us at a rational and emotional level but they
also threaten our survival instincts. And  as such they are bound to impact employee productivity, loyalty, and creativity. Meaning is the underpinning and decisive factor of human efficiency. How could a corporation careless of its employees’ and
employees’ children future ever encounter long term success in a flat world?

 

In order to maintain competitivity, growth and profitability
organizations will have to build sustainable blueprints for the future. Take a look at Adam Werbach‘s latest book:
Strategy
for Sustainability
.

The Deloitte report is an example of a brilliant work conceived in an
intellectual tradition largely limited to our analytical minds.
Yes, they do mention creativity and talent and yes, they talk about information flows, but I wish they had mentioned sustainability. A quick glance at the Intuitive Compass shows us that Deloitte overlooked the South West Quadrant. Regrettably, this is often the case with our business thinking.

intuitivecompass.gif

Going forward, we cannot leave out the importance of our reptilian brain in its relentless ability to impact every second of our lives and its superior intelligence to sustain our species and hence help us make the best business decisions for a sustainable future (1).

Here’s looking forward to the the 2010 Shift Index; I hope to see a section on sustainability and a study on the decisive intangible dimensions of value creation which intuitive intelligence is designed to help us reckon with.

(1) In 2004 MIT School of Science Picower Insititute for Learning and Memory has shown that the basal ganglia which are parts of our reptilian brain are involved in our most sophisticated decision processes (Nature, Feb 24 2005)