3349893325_986054da20Nir’s Note: This guest post is by Francesca Gino, an associate professor of Business Administration at Harvard Business School and the author of “Sidetracked: Why Our Decisions Get Derailed, and How We Can Stick to the Plan

A few years ago, Joe Marks, then Disney’s vice president of research, visited Tokyo Disneyland and was puzzled by a particular behavior he observed there. Park visitors were standing in line, often for many hours at a time, outside a shop in the park’s Frontierland. Marks found out that they were waiting to buy an inexpensive (less than $10) leather bracelet on which they could have a name painted or embossed.

Why were the bracelets in such demand? Joe wondered. And why weren’t other stores in the park selling the same bracelets, so that Disney could improve visitors’ experience by reducing their wait time? In Joe’s mind, the company needed to make the popular product more easily available.

As it turned out, Joe’s intuition, though supported by standard economic theory about supply and demand, was wrong. The visitors he observed usually were standing in line with their sweetheart or spouse. The couples’ willingness to patiently wait for the bracelet was a signal of their strong commitment to each other, for according to a Japanese tradition, exchanging leather bracelets is a sign of bonding. It was the very act of waiting for the bracelet that made the product so popular.

All of us have been in the position of trying in vain to make sense of the behavior of a colleague, boss, spouse, or peer. Typically, it is our faulty intuition that leads us off track.

To take another example, my colleagues and I recently conducted a field study of Indian workers at a call center. The managers believed that, to train happy and productive workers, the orientation process should focus on stressing why new employees should be proud to join the organization. But in our research, we tested the senior management’s intuition and uncovered a much more effective approach: giving new employees the opportunity to think about their personal strengths and how they could apply them to their jobs. Workers who were encouraged to do so were more satisfied with their jobs, more productive, and also more likely to stay with the organization than were those who received more traditional, organization-centered training.

Most of us know little about the functioning of our internal organs, such as our hearts and our kidneys, a fact we readily admit. When our bodies don’t function as we expect them to, we invest time and energy in learning more about how they work and trying to improve our health. But contrast, we approach our minds differently. We believe we understand exactly how our minds work. Even after our decisions lead to disappointing outcomes, we do not investigate what went wrong and try to find out how we might improve our thinking.

By recognizing the limitations in the way we make decisions and correcting for them, we can be more successful in both our personal and professional lives. Through this approach, managers and organizations can adopt practices that lead to more successful outcomes. For example, after recognizing that patients often have difficultly remembering to take their medicine regularly, the startup GlowCaps designed a pill bottle with a special cap that sends reminders using wireless signals. And at Bridgestone Tire, company management wanted employees rely on data rather than their potentially biased intuitions when addressing product flaws. So managers taught employees to use two Japanese terms (which are key principles of the Toyota Production System) that served as salient reminders of the importance of investigating the actual product, or “genbutsu,” in the actual place – “genba” – where a problem emerged.

By identifying and accounting for flaws in human intuition, we can all make better decisions for ourselves, and understand the often-puzzling behaviors of our friends, colleagues and peers. In addition, managers can help create better products and services for their customers, and promote more productive environments for their employees. And policy makers can create more effective systems to help all of us stay on track.

Photo Credit: Diganta Talukdar via Compfight cc

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  • http://twitter.com/myinnervoice Miha Ahronovitz

    Marcel Proust, the French classic writer, said we should only use intuition when our reason fails to answer our questions. But even then, we watch and if our intuition-based decisions do not work, the logic mind takes back the control. Francesca Gina particular example of “of investigating the actual product, or “genbutsu,” in the actual place – “genba” – where a problem emerged” is a practical “how-to” guide to Marcel Proust insightful creative writing.

  • http://www.postlinearity.com gregorylent

    misuse of the term “intuition”, which is a power of developed consciousness, known to mystics for centuries.

    better use above would be “assumptions”

  • http://www.g-row.com/ Inspiring

    I recently got into the research of intuition and has to agree with gregorylent. When you learn how does intuition work (as Nir advise – invest the time to understand your mind) it seems that it can provide many useful insights. We basically use the potential of your subconscious via intuition. But I agree with Nir that what we think is the reason behind some behavior doesn’t mean that it’s the reason. If you learn how to cooperate with our intuition though I think you would be guided to flaws in products as well as to the explanation of a behavior, but intuition can offer you even more. To use intuition is a trip beyond our regular thinking.

  • mark@crossovertechnology.com

    mark@crossovertechnology.com

    Interesting article. It calls to mind the work of Daniel Kahnemann, Nobel Lauriate in Behavioral Economics, and his work in understanding the two operating systems of the brain: the fast thinking intuitive system that dominates our subconscious and evolved for safety, and the slow thinking analytical system. See his latest book: Thinking Fast and Slow, for a survey of his life’s work in discovering the profound influence your true statement “We believe we understand exactly how our minds work. Even after our decisions lead to disappointing outcomes, we do not investigate what went wrong and try to find out how we might improve our thinking.” has in our lives and in business.

    Second, I am reminded of Thomas Edison’s first, utterly failed, attempt at innovation. Like Joe Marks’ mistaken assumption about a problem to be solved in the Tokyo Disney example, Edison’s first attempt at a commercial invention was an electric polling system for the Massachusetts Legislature based on uninformed observation. He observed how slow and inefficient the process of tallying votes was on bills before the body and proceeded to create an electric system that made the voting process fast and efficient, but, like the Japanese couples, it turned out that the legislators had no interest or need for a more efficient experience, the part of the vote gathering process they valued most was that it forced interactions, debate and deal making with their peers. This experience caused Edison to literally invent the process we call ethnographic research today and to learn to assess needs by understanding deeply the processes and experiences of target customers. His next invention was a machine that was the forerunner of photocopiers targeted at insurance agents and it launched his great success.

    Thank you for sharing this Nir.

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