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What you don't know about human intuition can hurt you
Nir’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’ experiences 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. 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 human 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 human 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 human 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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