![Professional Intuition in Decision-Making [We Shoot From The Hip]](http://happiness-consulting.com/wp-content/uploads/2023/12/economics.png)
Intuition In Economics, Business & Money Markets – How to decide smarter applying professional intuition in business?
Daniel Kahneman, the Nobel laureate economist, is mostly famous for analyzing the links between life satisfaction and economics. In one of his precious papers, he writes about what is worthwhile in our lives. In his opinion, intuition is a necessarily simplified tool for efficient decision-making and a long-term measure of life satisfaction.
I.1.1. Why is our time a capital?
From a Noble Laureate economist’s perspective he describes in nine-page paper “Thinking, Fast and Slow”, life is like a capital that becomes available at the beginning of our lives in the form of time. Leaving our death bed pushed out lying on four wheels from the hospital ward, our relatives may state: “uncle Bill lived X years, Y days”. We can define that we have a certain number of years, months, and days available. When the black hooded guy with the reaper comes, that was it for us; the curtain falls down.
This available time we can’t spend – “Joe, give me five thousand bucks, and I give you a month lifetime from mine” -, nor can we give it away – “happy birthday darling, here is a month from me” -, and similarly, we can not add to it either. This time is like a blocked fund on our account or an asset stored in a safe-house proven with an SKR (safe keeping receipt).
At this moment, we don’t exactly know how much time we have left – as death works in several ways -, still, from a global perspective, we can say that the average life expectancy of humans on Earth is currently (2021) 73.2 years for both sexes (75.6 years for women, 70.8 years for men) – based on their gender at birth -. If the kind reader is 50 years old, then on average, she has 25.6 years-, or he has 20.8 years left in the precious pocket. That is about 1/3rd left. Everyone can calculate how much time one has on average. Anyway, the kind reader may kindly relax in some respect; this author does not sell any life insurance here. We just look into the face of reality as it is to be prepared for it and make the right decisions. To feel it in our bones, why time is our most precious asset, and further more, to discover that goes even beyond that, we now examine few significant factors in life.
I.1.2. What is valuable in our life?
What are the worth of beauty and a healthy body?
The available time we have is a biological time worth most when we get birth and worth less and less when we are getting old. When we are young, we look good, have a healthy body. At the same time, as we are getting older, our elderly and not too healthy bodies can not serve us as well as they previously did; our teeth and hair may fall out; we get old, sick, and then we leave for the eternal hunting grounds. In the mid-term, investing in bodily health seems like a profitable business; still, it is an unavoidable bear market from the long-term perspective. For a while, we can enjoy our beauty, strength, and health; yet, this all becomes dust at the end.
What is the worth of material wealth?
When we are young, material wealth does mean much value for us, as we don’t know much about it. A gold bullion does not worth much for a little child. Only when we grow older do we start to internalize the concept that it worths such and such. The value of material objects gets more vital for us when we get into the big role-play of life as an adult. As the German says, “fast, fast, learn, learn, get a good job, build a house, make children, pay taxes, die”. For most people, the importance of material wealth is like a Gaussian curve with a bell-like pattern. Arriving to a certain point in life, for a while, everyone wants to have ‘Power, Fame, and Fortune’(PFF); still, this intention usually peaks its relevance when we are in our mid-ages. The amount of time we spend we have this mindset depends on when the feeling of sustainability enfolds in us, as a next stage of the stairway-like development of values – we will talk about this in more detail in the chapter about sociology -. From the point of time, when we have children or people to care for, we start to give things away, and the PFF of our loved ones becomes what we care most about, as we already had it all. Only at our death bed we realize that our power, fame, and fortune can not come with us. Our big house, nice-looking bank account, and fancy car will all stay back. The last shirt has no pockets. When the time comes, we will have to leave it all behind. No wonder, that surveys show, that spending on doing something, spending on experiences makes us more happy than spending on owning.
What is the worth of experiences?
Interestingly, the accumulation of wealth or looking for experiences have the same root. We all want to be happy, because that is good for us, and others, as well. Kahneman conducted a survey together with Gallup, which shows that people won’t get more satisfied or happier by increasing their income after a certain amount of monthly payment. That may be different in various countries and cultures; nevertheless, it is connected to the ‘stress-free life-security level’, everywhere. Being religious and even the fulfilled experience of an upcoming weekend has more effect on happiness. Positive psychology research gives the solution that social giving – business gifts, a department group dinner, etc. – and gaining experiences make us happy instead of buying things. So, can we say that we found it? Is buying or gaining experiences the eternally right solution?
From an economic or business standpoint, in terms of experience, we are not only talking about going out to play golf or to have a bowling evening with the department, but we also mean work/business experience and soft skills training, that some investment can obtain. According to Kahneman, our lifespan represents a capital of experiences worth least when we are young and most when we are old from the economic point of view. As our remaining years continue to decline, our experiences, expertise continue to grow. Still, as we get closer to the end of our lives, every hour will have a greater and growing value to us compared to the previous. We can only gain less and less experience than the total experience we have had so far. In terms of economics, we can say that we pay more and get less – says Kahneman. Even though experiences can contribute to our happiness in our youth and mid-ages, we can get less and less from them with more and more effort as we get older. They are not inherently profitable in the long term.
What is the worth of watching TV?
When this author wrote this title down, he meant it first as a joke. Anyway, science shows that watching TV makes us more antisocial and unhappy. This author was a leader of Samsung’s TV marketing department (that also made the sales control). He has also led the countrywide PR & marketing operation of NBCUniversal’s TV networks. While being in those positions, he did not have a TV subscription, even for a single channel -don’t tell anyone-. He does not have since either. He informs himself of the news every morning in an on-demand way.
What is the worth of friends and family?
Positive psychology research propagates spending time together with friends and family, as it has an outstanding contribution to our happiness. We count on them, and they can count on us. We give each other love, respect, and support in many ways, including financials. We get more satisfied when we can help our children with good education, establish their lives, and leave a more significant sum as a heritage for them.
Still, as we get older, children fly out, friends spread around, or we just feel more comfortable sitting at home. We get to the point that it will become the most important moment of the year when they visit us on a national holiday.
Also, they can’t even help us on our death bed. When in the natural process of dying, we feel as if our body would get heavier. We lose water or feel thirsty. Our limbs get colder; our breath gets torn. Then we breathe out with three big sighs, and after the third, we do not breathe in the air again. In these hours, minutes, or moments we can only count on ourselves. At the moment of death, it is only about our mindset -that we always have with us-. This state of mind defines if we stay calm and relaxed. Friends or family members can’t help even though they are standing next to our bed. They can only make good wishes so that we go through this peacefully. Finally, friends and family members stay; we go. We proceed further alone (to wherever we believe we go). Thus, hard as it is, we can not say that friends or family members are constant-unchanging, always with us, or are an ultimate source of help. Nevertheless, the positive paradox is that the more we helped them in our lifetime, the more satisfied and relaxed we will be at the final countdown. And when we leave our body, this is the final attitude or mindset we take with us.
What is the worth of time?
As we are getting over our mid-ages, becoming older, and especially at the end period of our life, we usually wish one thing: “I wish I had more time [to do this and that]!”. Thus, we may conclude that time is one of our most precious assets, our most valuable capital. Therefore -says Kahneman-, it is worthwhile to be effective. When we do not have much time, we have to use what we have effectively. We shall direct attention to factors that have meaning and importance and cut away those that don’t. This way, we may feel that we gained time and used it in a meaningful way. We did not just get wealthier, but also wiser and happier.
Why look for lasting values beyond Disneyland?
Even though we say that time is our most precious for us, we have no control of it; we can neither accumulate it nor take it with us. We can just trick it somewhat by being more effective. So, what is the lasting value that we can take with us? What is the lasting value, about which we can say that it was worth living for? What worths accumulating in a very effective manner? Is there anything that won’t decline when we die, or anything that stays with us and we can take with us? We may agree that here we are looking for lasting values that bring responsible happiness for ourselves and others. Why? Because it is not effective to build an illusion, a fairytale or a Disneyland, about which we know that it will finally evaporate or has no worth for us when we are about to go.
We want to make sure that we effectively maximized the accumulation of lasting values. And not just any values. Eternal values that we can take with us, so when our third breath is out, we can confidently put the dot at the end of the sentence with an un-shaking hand, with a relaxed, satisfied, happy mindset.
If we believe in God, we don’t want to stand in front of God with a scarred face, shaking hands, ashamed about the life we had, don’t we? If we love God, we shall be happy to meet him in person, finally. For this great event, we mentally dress up in our most superior suit, don’t we?
Or if we belong to the eastern religions, we don’t want to enter the period between death and the new birth full of stress and confusion, as we don’t want to wake up in a fur in our next life, don’t we? We want to enter this in-between period with a satisfied, happy mind, and mind that is rich of the good deeds we did, to wake up as a human or a half-god in a lovely, big, rich castle. If we don’t believe in anything, we still want to put a nice dot at the end of the sentence, do we? Let them say he did his best, and he did it great! Look how cool and positive he is even now.
What has a real, lasting value about which we want to get more effective?
In his business consulting activities, this author often asks executives about why and for what purpose they work for. After the fifth or sixth answer after the “…and why do you do that?” question, the picture gets clearer, thoughts get distilled down. In the end, in each case, we find that we are all striving to make our lives happier. When asking, what we need for happiness, the answers distill down to awareness. First, we have to recognize what is going on with people (innerly or outwardly) and within their projects, then be happy about it or change it for the better. This is what all decision-makers do. First of all, they do their best to listen and watch, check and be aware of what is happening, and in the next step, they lead people to do things better or do better things. They build happiness in a responsible way, which means they build responsible happiness. Why is the development of responsible happiness (that combines awareness intelligence (AQ) and a happy mindset) a good idea in the long term?
Because we all agree that doing good is good; doing bad is bad – simple as that. Results are similar. Positive psychology says, “good” means: happiness, fairness, raising others, love, compassion, freedom, telling the truth, giving, helping others; and “bad” means: suffering, unfair treatment, suppression, pushing down others, lying, anger, hate, greed, jealousy, exclusive pride, harming others. Many of us know this; still, as it is not so evident for everyone, we had to write it down.
If you hear somebody say, “but this is business, it’s a war, and it’s about how to trick and beat the competitors”. Mainly those with high financial motivation, greed, or big business drive tend to think this. It is a typical example of Machiavellian thinking. He was a super-desperate person tortured a lot in the middle ages, so he had immense traumas on his back. His ideas about ‘bite first or be bitten’, ‘divide and rule’, and ‘tooth-for-tooth’ thinking represented the dark ages when the average IQ and EQ were way below today’s average. This kind of animal-like level of thinking is already outdated in our society and business. It has no relevance anymore, it just draws us all down. It is unfair and does not belong to our society as a mean wolf does not belong among a flock of playing emotionally intelligent vizslas – the royal-bread Hungarian hunting dogs -. When this author had a vizsla, it was brilliantly smart and kind – in some cases, he behaved almost like a human –, still, it protected our family with great power when needed. This author votes on vizslas instead of wolves.
How mixed actions annihilate good results?
We also have to know that doing bad with a good intention is similar to doing good with a bad intention. Both are mixed. Good and bad are like two vectors annihilating each other. We don’t get further with it. They have a way less good effect than doing good with a good intention. We shall intend to grow the good heap only so that it highly outweighs the bad one on a measure.
Any religion we may have agrees that what we take with us after our eye-lids are finally closed is the balance of the accumulated of good or bad thoughts, words, and actions. If PFF is our religion, we shall consider gaining it smartly in the long term and in a form that can last. Have PFF in lasting values. Being famous for doing good with our fortune. If we consider that a God of a monotheistic religion judges us after death, it matters if we were good people. We want to get to heaven and sit the closest possible to Jesus or God instead of rocking the highway to hell and sit closest to the guy that gets us into burning lava.
According to Eastern traditions, if we live our lives aiming to have our accumulated good accumulations weigh over the bad accumulations, then, in order to result in better rebirth conditions -nice, smart, and wealthy family that lives in a civilized country-, it matters how much good we did. If we don’t believe in anything, we have a scientist’s mind or are atheists, we can still listen to all science and logic, which says that doing good is healthy and brings happiness; also, doing bad is unhealthy and brings suffering. We can as well listen to psychology that tells us that we will only die in a relaxed way when we did good in our lifetime.
In any case, what we want to accumulate and take with us is a massive amount of good deeds, good speech and good mental impressions. That is what we want to get more effective about.
If time is our most important asset, and doing good with a good intention is the most valuable thing we can do, let us then be more effective in doing that. This is what brings a lasting positive effect both inside our mind and outside in the world. Time flies fast, so we want to have razor-sharp effectivity in doing good.
I.1.3. How can we become more effective in doing good?
Why is decision-making effectivity like oil in the gearbox?
When our intention is on the bright side, we will make good decisions that benefit people most of the time. As we get more experienced and wiser, as we have more awareness and have more tools to transform things to become more positive and happier, we just have to turn up the speed. We just need faster decisions.
When we have a bad intention or wrong, mistaken views, we will decide well two times out of ten. When we have a good intention, we will decide good at least eight times out of ten. If this was roulette, and we have a good intention, we just have to play more; we will still be on a winning curve.
Then, we can live a more vivid life, do more good, and enjoy the flow of life more. Intuition applied for decision-making effectivity is like oil in the benefactors’ gearbox.
How the speed of decision-making translates into professional intuition?
By speeding up the gears, we can collect more experience. The more experience and expertise we have in our profession, the more accurate we can tell our business’s future. After a while, we can just feel it in our bones if something goes right or wrong. No matter the charts and numbers, we can just feel if a direction is right or not. We handle complexity with a gut feeling that is based on our several years of experience. We all know this. According to Kahneman, we have a desire to develop our intuitive decision-making. However, most of the present societies usually suppressed it or did not develop it. So, if we were to listen to our spontaneous insights at the moment, we would not always make the right decisions. This happens because we are not trained. Prof. Gerd Gigerenzer from Max-Planck-Institut, who researches intuition-based fast decision-making, agrees exactly with Kahneman. In contrast, today -though it was not always like this- we tend to rely on a much slower method than intuitive decision-making and consume more brain energy, that is, intellectual thinking and logic.
I.1.4. Why is intuition the highest form of intelligence and decision-making?
A survey that this author conducted about professional intuition shows that more than 80 percent of leaders apply their intuition ‘often’ or ‘very often’ in their decision-making. “These numbers show” -as analytics say-, that we all do this, or we can say, as the author felt, that everyone does this, he conducted a right survey with the right question, to show it, translate it to the era of common style logic-based business thinking. It is a hook that draws attention to the fact that “there is no hook”. Of course, top leaders do not need to justify their decisions, so the use of gut feelings has become more widespread in their circles. Many of the great leaders are promoters of intuitive decision-making simply because they are more successful with it.
According to a survey made by Project Management Degrees, 62 percent of top business executives apply intuition. Another survey, this time from Forbes shows, that 77 percent of CEOs are looking for the skill of interrupting patterns. To break the flow of analytics and change the trends by bravely applying gut feelings – “What if …?” -. As Prof. Gerd Gigerenzer explains, “the primary challenge for human intelligence: to go beyond the information given”. He also says, “innovation needs intuition, it does not work in another way”. No wonder that even Forbes discusses Prof. Gigerenzer’s work and calls intuition the highest form of intelligence.
A study of the University of Oregon revealed6 that the intelligence quotient (IQ) refers to remembering many numbers -like a hard disk of a computer (HDD)-, still, it has no relation to the continuously used intelligence that helps us navigate in the flow of life called fluid intelligence -the overall performance of the computer-. It’s not IQ that counts in everyday life and business, but the fluid-, flow-like intelligence. IQ counts mainly when we participate in a “who remembers more information” quiz show. What really matters in our daily operations and decision-making is not the size of our head but the “clarity” of our thinking and mindful recognition of behavioral patterns and reactions, emotional intelligence (EQ), and a good style. We can wrap these up by saying that awareness intelligence (AQ) is what matters that ensures the operational efficacy of our flow-like intelligence.
Leadership experience & freedom called professional intuition
Kahneman calls our gut feeling that is based on professional experience: professional intuition. The basis of this is that on the one hand, we accumulate a lot of professional-, logical knowledge. On the other hand, we allow your intuition to choose the most appropriate solution from the tools we diligently collected to our practical toolbox. This idea suggests using both our heart or gut and our brain at the same time. As practice makes perfect, the reliable development and use of professional intuition requires the ability of continuous practice and to receive proper feedback -says Kahneman-.
By improving our professional intuition, we can become more efficient in doing good in business and economics. We will be more successful, lead easier and live freer. Therefore, we can consider intuition as a master formula that helps professional decision-making. This is the book in which we find both information about it and scientifically tested methods to practice it to become masters of our highest form of intelligence, our professional intuition.
I.1.5. How do we apply professional intuition in business practice?
Why are we afraid and use numbers to protect our backs in business?
There are three reasons we may turn towards numbers in our decision-making.
The first scenario may be that we just like them. We have an analytic mind, and thus, numbers and analytics are ‘the thing’ for us. In numbers, we trust.
The second may be that we still turn towards numbers from our own good free will to perfect our decisions. We are not ‘numbers persons; on the other hand, we developed the skill to use them, and we take the effort to do so. We wish to collect more information to gain more accurate knowledge. This activity is perfect and very useful. It may also happen that we are so good at it that we amaze our boss. Sometimes it is possible to shine with numbers. When this author entered Samsung in one of its first weeks, he created a price table for the Korean coordinator that did the following: after pressing a key combination that called a macro, it automatically made pivot tables, copied and formatted their results, and exported them to individual Excel files as individual price sheets for three countries. The jaw of the coordinator dropped to the garage. The reputation of handling data got well established.
The third scenario may be that we have a strict boss who puts mental pressure on us to reason based on numbers. In such a situation, employees get in a tension-full sympathetic nervous setup. Aggressive, anti-social, or old-style leaders and their fearful people made it a custom in some places looking for only logical reasoning based on numbers, hoping that it may provide secure grounding and show expertise. People are afraid of ‘falling’ in this kind of situation, so they try to hook to market numbers as a hiker reaches out for a stabile ring on a cliff to secure its position. They try to climb by quoting numbers in every step they do. In these case the expected rationale became the following: “Based on these numbers we may say that …”, “The trends say, that …”, “The recent analysis shows, that …”, “According to the current status of this KPI, …”. If we use this reasoning, we are on the safe side in traditional business.
In a stressy company culture, this is what people do to protect their backs. Being one of the leaders of Samsung, this author reported to the VP, who evaluated life and actions as a whole and did not only look for numbers. Nevertheless, much in business depended on his Korean shadow-man, who was running around with his datasheet folder all the time. He had to know the numbers, or at least read it out in few seconds. He also forced whomever he could to do the same.
No wonder that when he was sent back to Korea, we gave him a traditional style whip as a farewell gift to provide the proper possibility to do the whip-cracking at home. (Best wishes to you, Kiho, anyway.) No matter how hard we try, as the nature of reality is more complex than numbers; we can not calculate reality. Just think about a pandemic that appears suddenly and changes all targets and marketing activities.
Why to be brave and apply gut feelings in decisions?
Now let us imagine a scenario when numbers a used, at the same time, intuition is accepted and excepted in the same manner.
While reasoning to HQ or the shareholders, leaders can say: “My experience whispers to me that we shall focus on …”, “Even though the global trends say that this worked with this and that market, I feel that it won’t work in our market”, “Well, I understand that HQ would prefer us to introduce this product, still, our experience with similar products show that …”, “Some signs made me think to slow down with this, as there may be something wrong”, “I was out at the retailers, and we feel, that even though the trends say that we shall focus on this product, we shall leave it for now as it looks like that this other product line will become a hit”, “How about we pick out this product from the portfolio, pair it with this target group that has the same style, hook their celebrity on it, create a microsite and run a social media campaign on it?”.
A leader who accepts these arguments means that they have real business experience and know that these hints are the essential glimpses or flashes to move a product line or a company forwards. There is nothing as precious as experience-based gut feelings, except the leader that accepts and expects them.
This author did a mountain of time-consuming number-crunching at Samsung for his weekly reports to the VP and the CEO. Weekly target-fulfillment of sales, market actions & campaigns, price movements of each product’s competitor product, action-reaction and planned actions presentations, P&L reports, forecasts for the production planning, target group reach and feedback of marketing and communications campaigns, whatnot.
Step by step it got evident for him; numbers are mainly used to protect one’s back. Even though they can be useful to argue based on them, they can become one’s burdens at the same time. Apart from that, they take a lot of time from precious creative activities. Numbers can not tell the future, nor can they tell what the competitors are doing while we are deciding based on historical numbers. Numbers are good to describe the past but are not enough in themselves to predict a complex future. Further on, when we decide based on numbers, we are just running after the market. We are always one step late. Working this way, we can not become market leaders.
Thus, this author played the numbers game; still, he was following his own nose. Acting and reasoning as if he was following the market trends provided by market research companies, he experienced that they did not matter too much; everyone goes with their gut in daily decisions. Thus, -also based on the smart and perfect insights from Michael Z. from the company’s EU HQ-, his team achieved to be usually one step before the market. In many cases, when competitors followed the market trends, they followed his team’s activities. Samsung brown goods (TVs, etc.) became MS #1 in all major product categories that count. With the sales & marketing team’s efforts, the brand awareness grew, the brand’s positive opinion, and the customer satisfaction increased, the OM and P&L improved. This author learned that when we have a feeling of what will work best, we shall go with it, especially when other team members have the same feeling as well. We shall carry the slogan of shoe-makers: ”just do it”, “impossible is nothing”.
As Prof. Gerd Gigerenzer explains it, intuitive decision-making helps leaders when an unsure situation appears, and about 50 percent of decisions are being made this way. When people decide intuitively they have to take the responsibility on themselves, but most people are afraid nowadays to do so, so they try to protect themselves with a structure. Therefore he suggests, that leaders may collect the data, analyze it, form their intuitive feeling about it, send back their assistants to bring further data about that corresponds to their intuitive feeling and then form it as a decision. This provides both the freedom of intuition, and the security of backup numbers.
He further suggests that the long-term solution is to change the negative failure-based company cultures to learning-based company cultures. Failure shall not be punished, but we shall take the facts as an example and opportunity to do things better next time. There has to be a forgiveness ‘card’, which leaders can use when they make a big decision in an uncertain situation best they could for the common good, and it did not work out. People are more important than things that happen. At the same time, we have to be brave to decide because however we try, the reality is so complex that we can not logically cover it.
I.1.6. How does professional intuition appear in practice?
Why to remove the pressure factor from business operations?
At Samsung, this author experienced how the militaristic pressure-based mentality ruins all precious connections. He played along with the game of internal politics for a while as he felt that he has no other choice than to do so until the cup got full. That was the time when he realized that creating tension, stress amongst people, playing out the divide and rule card between departments for an imaginary target number is not profitable for anyone. It results in the opposite; it crashes people and drops them out of the job. Placing pressure on people while not providing enough resources to hand over some tasks further, forcing them to report every single movement, incite people against each other is not a smart thing in the long run. It becomes stinky for people after a while, and they leave the ship as soon as they can. Okay, some race-pressure is healthy for development; still, people can even crash in tears on a board meeting when everything gets sympathetic.
After Samsung, when this sincere author led NBCUniversal’s business, he experienced the total opposite. He was lucky to have a leader at NBCU’ London HQ in a person of a wonderful, short stature, and very kind Hindu lady from Delhi, Laxmi H.-, who also had massive experience in number crunching as well from her previous job at Western Union-. She gave her people almost totally free hand in conducting business.
To understand the setup, we shall know that the TV network business depends on two main things. First is the content -that supposed to be not only soap operas, but also movies from Universal Pictures, and at least a tiny bit of localization-. The second is the PR & marketing activities you support the brand and the content. These two factors are what the distributors and the ad sales agencies need. We brought perfect PR & marketing numbers due to the freedom of decisions Laxmi provided. “I trust your experience, please show me what you can”- was the attitude. This author launched several gut-creative online, ATL & BTL campaigns; all worked out, reaching the target group. The brand awareness of the main channel -Universal Channel- grew and grew.
On the other hand, as sales did not grow so well, the HQ made a failure. Instead of investing in content, they chose the way of restrictions. They suddenly appointed a person with Muslim origins, who was using his master mason hand gestures to convince a business partner -of which this author got aware of-. Restrictions and the aim to control continuously appeared. This author felt happy that he did not accept the position this mentioned person offered him in the London HQ. With certain signs, this author “asked for” stopping working for them. No need to say that without proper content and with applying systemic severity, not much later than their ways parted, NBCU lost its channel.
From this, we may conclude, that to get ahead of the market average and the competitors -and make them follow us-, we need first to give something to the market (in the form of an innovative, perfect product or service for a reasonable price). This then has to be handed over with creative insights (actions, promotions, communication campaigns) and the freedom of professional intuition. Still, creativity and intuition can unfold in a stressless, positive environment.
As creativity and professional intuition stem from the same root, both product development and the sales&marketing packaging need them.
From 2015 to 2017, Samsung’s global premium TV share dropped from 55% to 13.2%. Why? Because it seems to this author, that in a militaristic way, they were forcing to sell the panels they could produce (QLED) instead of letting over the rein to the beautifully looking lady of creativity (and reallocate investments accordingly) -what customers wanted (OLED)-. Similarly, when a TV channel’s programming department does not have the resources to buy exciting and creatively selected content, the channel collapses no matter how nice the packaging is.
Thus, we need creativity and professional intuition for both the product and the packaging. And when we take a look into the core of these, we see that to enfold creativity and professional intuition, we need a pressure-free, positive, parasympathetic company culture.
Why a pressure-free company culture worths, from an HR KPIs perspective?
When people leave the boat due to pressure, the replacement cost is high -especially if it turns out to be a bad hire, which it did-, and the recruiting/ headhunting takes time. The position-specific training and the job-acclimatization take long. Even the decline or even the non-continuing growth of the business carries a loss. Also, the management experience and knowledge that leaves the company represent quite a significant value. It is not a profitable idea to conduct business like this. When successful leaders are forced into business-political games or are being squeezed, it is a minimum that they leave (if they don’t bite back).
Why are operating income, profitability ratio, and also HR KPIs as job satisfaction, employee engagement3, and well-being much higher at firms that treat their customers and their people well? Because what you give is what you get. When you give freedom, you get freedom -your business will have a good flow-. When you authorize people, they earn you that the business gets appreciated. When you invest in a good cause, you get back more money. Also, the opposite is true. The majority of firms already understood what treating people well, fairtrade, freedom, authorization, causal actions, and win-win mean.
Therefore HR has to give red signals to the HQ if they want to appoint a subsidiary leader who knows the numbers but is antisocial. Loyalty to the HQ and having the same nationality is not enough to be a good leader. When a number-crunching engineer from the factory is appointed to become the CEO of the business operations, we can start to hold our heads and shake them. Lee, the engineer from the Samsung factory, was an ordinary guy in the factory, a regular guy, known long by the business department’s local VP -a lawyer-. When Lee got appointed, he resented for being called Mr. Lee. “Okay, Mr. Lee, as you wish.”-said the local VP-. Anyway, the best story with Mr. Lee is the following. We are sitting on a board meeting; it’s about to end. Now it’s Mr. Lee’s turn to summarize it all and give his directions. Mr. Lee takes his tiny black notebook in his hand, holds it in front of him, a bit above the table. He looks in front of him through his huge glasses and says the following: “We … Shall! …” -and here comes the full-round meaningful silence as in a crypt of the dead, while Mr. Lee looks in front of him like a statue. After two long silent minutes or so, without any word, he stands up and leaves the meeting room. First, we look at each other with big question marks in our eyes, then focusing all our power to hold a meaningful and respectful face in front of all the Korean coordinators that are present. Then, we slowly, respectfully walk out of the meeting room, go to the elevator, go out of the building and laugh our noble bottoms off.
In case we are HR directors, we shall insist on matching the values and capacities of the task and the person that is supposed to fulfill it. In Part I. Chapter 4 we discuss the sociological values and mindsets connected to professional intuition. When the boss-employee match is done, we shall do our very best to inspire, train, and develop a company culture that promotes contentment, engagement, well-being, happiness, and awareness intelligence. As human strategists we shall cultivate responsible happiness amongst the leadership and people.
It is best for everyone.
How we apply professional intuition while taking risk on the money markets?
When we hear the word economics, we mainly relate it to material processes, products created and sold, and the services that support this process. Nevertheless, the peak of economics are the stock markets, commodities trading, and money markets (forex or crypto) currency trading. As printed money will lose relevance, we will most probably have only electronic currencies in max 20 years from now (2021).
Trading means -and all of us heard about this in some forms-, selling and buying these assets. We guess, estimate or calculate if it will go up or down, and we “enter a position” to buy or sell it. To enter a sales position means that we earn money when the price goes down, as we can close the position by buying it at the end. Entering a buy position means that we earn when the price goes up.
While this author was still in economics college, he won a countrywide economics contest with his paper about the stock markets and made 70 percent profit in half a year with stocks and futures -when we use a leverage, a kind of multiplication factor while doing it-. During his last summer holiday, he also worked as an OTC broker. Also today, he runs his automated trading engine on a server, that makes him a reasonable additional income. Therefore, even though it is not his profession, he has a bit of experience in what he is talking about regarding money markets.
When entering a position, one can analyze the market movements in a fundamental way -reading news and considering their effects on the markets- or in a technical way -analyzing charts, trends with specific mathematical calculations or geometries related conclusions-. Any of the methods one applies, one can only tell for sure what has happened, but the future will always stay uncertain. One usually calculates the probabilities of trends based on the mixed constellations of different price, trend, or volume indicators called, for example, EA, MACD, Stochastic, Bollinger Band, CCI, etc. The way one sets their properties and combines them for sell/buy indications is called a trading strategy. We can easily download, e.g., the ‘Meta Trader 4 or 5′ trader-program after creating an online account at a broker or registering at any online automated trading engines. We can then buy so-called expert advisors (buy only the expensive ones), tiny strategy add-ons, that can trade by themselves even with excellent results. One may as well follow others’ trading strategies called signals that can make a lot more yearly profit percent of the investment per year than bank interset rates, still, they are not perfectly accurate. Either the drawdown -the temporary equity decrease- is high, or the accuracy is lower. There exist even 100 percent accurate trading strategies that, on the other hand, do not trade very rarely; hence, their profit rate is not too high. When ‘backtesting’ these strategies on historical data with 99 percent accuracy on 20 years historical tick-data, they rarely provide more than 85-90% or higher accuracy connected with an acceptable level of drawdawn and a reasonable profit ratio. We may create a reasonable passive income from this. This author does. Nevertheless, even though we apply cautious leverage like 1:30 and choose the best mix of these indicators or apply automated expert advisors or trading signals, the chance still exists that we can lose money instead of winning. The devil never sleeps.
How could we calculate with a factor that happens every few years, that, e.g., the US and GB monetary institutions start to strain each other, squeeze each other, and make a silent but visible tug o’ war with the prizes? Some of the automated strategies break and produce loss at that time. This happened to this author as well; his automated trading strategy bots have been experiencing quite an amount of difficulty in these situations. When one becomes aware of what happens, one has to manually reach into the soup, close the position, especially when one uses a high leverage. There is a reasonable stop-loss that we may use while trading manually, not to fall into sentimentality and allow more loss than the acceptable level. Still, some bots don’t set stop-loss levels. When to close a position in that case? Will the currency pair recover? When will the monetary policy factor get out of the market and let it be?
When we are in a live situation of decision-making, where our heart beats like a drum, it is really not easy to decide. We can analyze the hot situation with thousand indicators, but in these moments, they change constantly; they are unpredictable; the only thing we can rely on in this situation is professional intuition. What feels right?
When an unexpected situation appears that the market and the market-analysis-based trading strategies did not count with and the available equity decreases -meaning that we make a loss that is over our accepted level if we close the position manually-, what is the best thing to do? How do we decide? Shall we open a position in another direction? Do we have enough margin to cover it if this mayhem continues? Shall we leave everything, go to sleep, trust the robot, and hope for the best to happen? Shall we close some positions and leave others? Or shall we close all positions and swallow the frog? When we are in a live situation, we have to feel the market best as we can, relying on our experience, and feel the power of the moving forces. The only rule that applies in this situation is that we shall decide based on our gut feeling, our professional intuition.
At that time, we better be trained in stress handling because professional intuition works only in a parasympathetic nervous setup, with a relaxed mind. We shall be able to transform stress to peace of mind, and relax our heart -we will discuss later exactly how-, so that we can look into the options with peace of mind and finally make the best decision with professional intuition -as nothing else is left-. When we cannot cover the world with leather, we shall at least wear a shoe. When we cannot change our boss or the outer circumstances that we find ourselves in, we shall at least be able to handle it by transforming our inner attitude or mindset about it. When we do this, we will miraculously see the outer situation changing for the better as well.
When we click the button this way, we are confident in our decision, whatever it may be. This method guarantees neither profit nor loss; it ensures that whatever happens, our chances for the right decision will be the highest —this one of the skills we get to understand and enhance by reading this book.
As our time’s best economic thinkers, including the Noble Laureate Daniel Kahneman and Prof. Gerd Gigerenzer from the renowned Max-Planck-Institut suggest applying professional intuition as a reliable tool of decision-making, we shall consider their credible words.
In the next chapters, we will be looking into scientific, tangible, physical explanations and factual evidence of intuition. The following chapter shows us how intuition appears from the quantum physics perspective and how consciousness and matter are related.
Takeaway
Life is like a capital that becomes available at the beginning of our lives in the form of time. This available time we can’t spend give it away not add to it either. Only at our death bed we realize that our power, fame, and fortune can not come with us. We can only gain less and less experience than the total experience we have had so far. Therefore, we shall direct attention to factors that have meaning and importance and cut away those that don’t. Doing good is good; doing bad is bad – simple as that. Time flies fast, so we want to have razor-sharp effectivity in doing good. Intuition applied for decision-making effectivity is like oil in the benefactors’ gearbox.
It’s not IQ that counts in everyday life and business, but the fluid-, flow-like intelligence. No matter how hard we try, as the nature of reality is more complex than numbers. There is nothing as precious as experience-based gut feelings, except the leader that accepts and expects them. When we have a feeling of what will work best, we shall go with it. To enfold creativity and professional intuition, we need a pressure-free, positive, parasympathetic company culture. As human strategists, we shall cultivate responsible happiness amongst the leadership and people.
When we cannot change our outer circumstances, we shall at least be able to handle it by transforming our inner attitude or mindset about it. We will miraculously see the outer situation changing for the better as well.
Conclusion
Time flies fast, so we want to have razor-sharp effectivity in doing the most reasonable: doing good. When we feel what will work best, we shall go with it; and develop this skill further. When we change our view inside, the outer circumstances will change as well.