Intuition - The Key to Business Success in Tough Times

From 2002 to 2008, as the economy buckled, professors Barbara Bird and J. Robert Baum tracked a group of business owners. They wanted to know why some SMEs survived the recession while others folded. The answer wasn't just a solid business plan or deep pockets. It was something less tangible, yet more powerful: the ability to adapt, pivot, and constantly experiment.

You’ve likely felt this pressure yourself, staring at a stack of quarterly reports, wondering if your next move is the right one. Bird and Baum found that the businesses that made it through those six years shared a common trait: they relied on a kind of ‘street smarts’ – a founder’s intuition honed by experience. It wasn’t luck.

Bird, then an associate professor at American University’s Kogod School of Business, argued that ‘street smarts’ mattered more than any business plan. An owner needs to make quick calls, learn from missteps, and keep experimenting. These traits, she found, predicted long-term success better than anything else.

“The intuitive mind is a sacred gift and the rational mind is a faithful servant. We have created a society that honors the servant and has forgotten the gift.” - Albert Einstein

But don’t mistake this for a dismissal of planning. Intuition becomes a powerful planning tool after you build deep knowledge of your business, its products, and your market. It’s expertise, not magic.

If you’re starting out, work for someone else first. Learn the industry on their dime, not yours. You must become your company’s biggest expert to guide it well.

Andrew McAfee, writing for HBR in 2012, pushed back hard on this. His post, “Managerial Intuition is a Harmful Myth,” argues we should stop trusting ‘experts’ intuitive calls. He points out that human experts are often overconfident, inconsistent, and blind to their own biases.

Gary Klein, author of “The Power Of Intuition,” agrees intuition can lead to big errors. He says it loses its edge when:

• You're working with bad, incomplete, or unreliable information.
• You don't weigh all the options.
• Short-term emotions or biases override the facts.
• You try to use it in areas where you have no real experience.

Klein isn't saying ditch intuition. He's saying sharpen it. To make an intuitive decision successfully, you need to:

1. Listen better. Your team holds crucial context. They offer information that stops assumptions and helps you map out a better strategy. You'll understand the problem, your options, and what's worked (or failed) for others.
2. Evaluate your decision. Spot where your feelings or beliefs might skew your judgment. Are you ignoring facts? Get an objective opinion. Even if they disagree, a third party often flags biases or alternatives you missed.
3. Communicate clearly. Intuition feels hard to explain. But your team needs to grasp your reasoning. Without that clarity, execution often falls apart. It's a common trap.
4. Practice makes perfect. Build a culture where mistakes are tolerated. Intuition improves with repetition. Your team needs space to interpret their gut feelings. Emotions signal past patterns; learn what they point to.
5. Track past decisions. Document similar situations and their outcomes. This sharpens your decision-making and reveals patterns in your own intuitive process.

Intuition demands caution, practice, and above all, preparation. It's not a shortcut, but a sharpened tool. It helps businesses make better decisions, faster, and adapt quickly to market shifts. Bird and Baum's work showed it's a powerful predictor of long-term success. Train your gut.