Saturday, February 9, 2008

Knowing in the Blink of an Eye - Can entrepreneurs really trust their gut-feeling?

I’d seen people reading it countless times on Tubes, buses, cafes, even beaches. I’m a sucker for fads so in July I went out and bought “Blink” by US author Malcolm Gladwell.

The central premise of “Blink” is that most of what we need to know about a person or proposition can be gleaned or “thin-sliced” from the first seconds of engagement, the blink of an eye.

“Blink” is interesting territory for social entrepreneurs because we, more than most, are people of the instant decision and the snap judgment.

Intuition is our guiding principle, our holy grail. We tend not to `do’ analysis, seeing it as less reliable than our gut feeling. Entrepreneurs tend to say they knew within a micro-moment that their idea would work.

At first, Blink feels like a vindication of the entrepreneurial approach. We are master “thin slicers”, modern geniuses who are instantly able to synthesise a thousand details into a single, fantastic decision. We are, in short, hard-wired, for success.

However, towards the end, this warm jacuzzi of praise runs ice cold. We are warned, in no uncertain terms, of the real dangers of split-second, “gut” decisions. Study after study is cited showing how our prejudices can blind us to the evidence and lead us to make dodgy decisions.

“Blink” concludes that, as often as not, our gut instincts are just plain wrong. Its author may have a point. The fact that 80% of UK entrepreneurs fail within five years probably supports this view.

One in five isn’t a good hit rate for those relying on their hearts more than their heads.

My own experience says this too. A few years ago, I got heavily involved in a new social business called Aspire.

At the start, when I met its founders and City backers, I felt instantly convinced that Aspire would change the world. On a high, and without doing much serious analysis of the market, the business model and the risks, I agreed, with my business partner, to set up a branch of Aspire in Cambridge .

However, when the doors opened, things didn’t work as we had hoped. While in social terms, we succeeded in changing lives, Aspire was a financial disaster-zone.

Things slid from bad to worse before we pulled the plug after about three years. Aspire ended up losing hundreds of thousands of investors’ money and was the first high profile social enterprise to go belly up.

OK, I hear you say, you got it wrong, we all make mistakes. But what hit me hardest as I read Blink was just how completely my heart had disabled my head.

So resolute was my faith in Aspire that it took me about 24 months to see what was obvious to several of our advisers from the very beginning. Namely that the business proposition was a dog, a total non-starter.

In a blink of an eye, I disengaged my brain for two years. Quite scary really.

Was I chastened by this? Yes and no.

Yes, in that I learned that social businesses need to focus, in the early days, on making a profit as much as changing lives.

Yes in that I now consult more widely before deciding to run with something..

But that’s about all. I haven’t really, deeply changed. This is because I am in my heart, still an entrepreneur.

I still hard-wired to make decisions in the blink of an eye, straight from the gut. Whatever Blink says about the dangers, I won’t change.

Does this make me stupid? No, for two reasons.

Firstly, because while I know that my gut instinct can let me down, I know that it can also lead to great things. While I was wrong with Aspire, I was right with Speaking Up, which has been a big success. Gut instinct is the well-spring of innovation and radical vision.

Progress depends on people who follow their instincts, often in the face of accepted convention and sceptical officialdom. Look at Tim Smit or Jamie Oliver for example.

Secondly, I, like many entrepreneurs, have learned to protect myself against my moments of madness.

I have surrounded myself with people who are different to me, If you look at soaring eagles like Anita Roddick, they tend to be working closely with a wise owl with a close eye for the detail, someone who you never normally hear about.

My own wise owl is now a woman called Kathleen Cronin. Kathleen is immensely bright, and, crucially, politely questioning about my ideas.

Finding `cornerstones' who are different, people who challenged us are among our first tasks when setting out as an entrepreneur.

Without other people, Speaking Up would probably, be just me and my dreams.

Or we’d have gone bust pursuing one of my weirder ideas. Instead, we’ve got great organisation with a sensible balance of high and low risk business.

So my learning from Blink is that entrepreneurs do not need to change.

But, if they aren’t getting enough challenge, they urgently need to change the people around them.

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