Going back to good old gut feel

AS A young account executive in an advertising agency in the early 1950s, I was faced with a client who was totally irrational, whimsical, maddening and mind-blowingly stupid. The fact that his father owned the equivalent of about a third of Chicago allowed him to be these things with impunity.

At one meeting, I got all hot and bothered about his nonsense. After an especially crass decision, I said to him: "Mr (Client), that is a very interesting decision. Can I ask you please what is the reason for it?" He eyed me up and down for a full 30 seconds, as rich people do the poor, and replied: "Reason? Hell, there is no reason. It's just company policy."

My diplomatic superior stepped in to save the account and the client went merrily on his way, convinced that he was God's gift to good management.

Years later, when I visited one of my favourite US cities, I drove for more than 20 minutes without losing sight of the buildings his business owned. Whether by then he had inherited the empire, I did not know. I hoped he had become more humble like his father.

Odd that the inheritors are usually arrogant while the creators often remain humble. There is a paradox to learn from there.

What does it mean to be whimsical?

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Whim is as difficult to define as gut feel. The difference is that whim is a cavalier, irresponsible mode in which someone might suggest, for example, that people should imbibe disinfectant to ward off Covid-19 - can't imagine anyone doing that, can you?

Gut feel is quite different. It is when your belly rumbles gently, like an old hippopotamus coming up for air after a good meal. The digestive juices work to settle the mingling of proteins and carbohydrates. When this happens to you, your mind is allowing all your thinking, even from the earliest days you can remember, to work on an opportunity or problem until it gets sorted.

Is it experience or something else?

What you have learnt and done in the past does play a part in gut feel. It is more than that, though. Good gut feel involves forecasting - not perhaps systematically and methodically, something all businesses need to do frequently. More thinking through likely developments, and especially their timing. The invention of the Xerox machine was an inspiration which depended on good gut feel forecast for its success. Today, all mobile phone apps are based on the ability to imagine the future. Creativity is at the heart of most good gut-feel decisions. And creativity is the ability to perceive relationships.

Use your creativity

Some of the best gut-feel decisions I have seen were stimulated by creative energy turning a potential disaster on its head. A good example of this is the defensive move of "attack" in an attempted takeover. When the defender turns on the acquirer and tries a reverse takeover, the acquirer's attacking posture is all wrong for defence.

This was used effectively when an Australian corporation tried to take over the company that owned a majority of the stock in Cerebos Pacific, the company I was building. The strategy saw the attacker off good and proper.

On the other hand, my parent company's decision to invest in the US and abandon Asia was one of the worst gut-feel decisions I have seen. The logic appeared right. Common language, similar business philosophy, and they chose an industry they knew - pasta. Unfortunately, the American version of Italian business was very different from the English version, and US business turned out to be quite different from the British system with its then collaborative approach.

Getting the timing right, being willing to take risks

The best intuitive colleague I had was in my early days. Advertising was growing fast because it was so profitable. That depended on an established and enforced cartel which prevented competition for clients.

My colleague saw that this could not last and persuaded me to join with him in making an approach - then against the industry's rules - to the biggest account in the UK, the Ford Motors European business.

We gave an amateur but blatantly competitive pitch and won the account. Much of the success of that move was down to my colleague's gut feeling that the time was just about right to break the cartel before it broke us. Three months earlier we would probably have been disciplined; three months later, the account would have gone elsewhere.

A cousin of mine at a carpet trade fair saw very high quality carpets being sold at what he thought was an unusually low price. So he bought a whole lot of them. He then walked to the other side of the fair with some samples and sold them all at a higher price of 20 per cent or more. He had placed a lot of money on his instinct, but he knew the carpet business extremely well so his risk was probably minimal. Nevertheless, it was a risk.

Ditch procedures

In recent years, I have seen less good gut feel and more procedural management behaviour. This is a mistake. Procedure protects everyone's back. It is therefore an avoidance technique. It allows people to avoid taking risks.

But enterprise and success were built on risk and repeated failure. It is how a child learns to walk, how a young man learns to woo a lady, how the old handle infirmity. Enterprise cannot be risk-free.

Forgive me if I end with a story about myself. When I came to Asia, I was charged to get rid of a couple of businesses whose product and purpose was Brand's Essence of Chicken. I decided not to sell them, but to develop them. However, we were making quasi-health claims, such as restoring metabolic energy when working exceptionally hard and after giving birth with its subsequent blood loss.

These claims had never been substantiated and were often thought, especially by westerners, to be nonsense. So I sent the product to Imperial College in the UK to test our claims. Better, I thought, that we know if they are wrong than if we find it out in a court case.

Happily, they turned out to be right, and this was confirmed in Singapore with the National University of Singapore (NUS). My gut feel was right. But I always remind myself that it could so easily have been wrong, too.

Gut feel is good. But it is certainly not perfect.