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Trust Your Gut? Don’t.

Finely honed instincts are the mark of the expert — and the enemy of innovation.

I’ve just completed grading exams, and my students are moving on to receive their diplomas. Happily, over the years, I’ve seen student performance on my exams improve. Part of the explanation may be that I am getting better at teaching. I’ve accumulated experience. But to be honest, I have a very hard time articulating what it is that I do differently in the classroom today compared to when I taught for the first time. Teaching has just become instinctive.

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Are my instincts my friend? Up to a point. Although change can be energizing, I’m not sure I’d find it easy to teach a different course, or teach in a different degree program. I’m not sure what I would need to change. There would be a period of trial and error. I would have to carefully examine the assumptions underlying my approach to teaching, and test how well they apply in the new context. That effort, in and of itself, would take time and energy. If I was too busy for reflection, it is almost certain that I would just keep on teaching the way I always have, for better or for worse.

I am not alone. Managers, like professors, have instincts, and those instincts can get in the way when a new challenge is on the horizon. It is particularly crucial for entrepreneurs to be aware of their instincts, because entrepreneurs are much more likely than most to be guided by them.

There are two reasons for this. First, entrepreneurial markets are highly ambiguous. Absent any solid data, business plans are full of ballpark estimates. Unable to rely on rationality and analytical decision-making, leaders use their judgment. They follow their gut. Second, leaders of new ventures face a great deal of pressure. For a startup, winning is often all about getting to market first. With all effort dedicated simply to getting things done, there is little time to think. Instincts win again.

If entrepreneurs have to be careful about instincts leading them astray, intrapreneurs must be downright paranoid about it. Business instincts are never more likely to get in the way than when established and successful organizations launch high-risk, high growth-potential new ventures.

Instincts are rooted the success stories in your own past. What happens when an entire organization shares the same success history? Instincts become almost unbreakable. Through every conversation, every meeting, and every major decision, shared instincts are reinforced.

I have seen the power of instincts in my own research. On several occasions, I’ve seen management teams that are able to clearly and consistently articulate the differences in business model between the new venture and the core business. Nonetheless, the behaviors that made the core business successful persist. It is one thing to state a new direction, quite another to actually break momentum. That is the power of instinct.

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Large companies are more enthusiastic about innovation today than they have been in five or six years. Particularly in industries where technology is having a dramatic impact on how the game is played — information technology, telecommunications, entertainment, health care, and more — innovation in the form of entirely new business launches is crucial. To succeed, leaders of these new ventures must actively attack instincts.

There are two powerful ways to do this. First, leaders must avoid the temptation to build a team composed only of their friends from within. They must hire outsiders, and place them in influential positions within the new business unit. Outsiders are effective instinct-challengers because their biases were shaped by a different set of experiences. They will naturally challenge existing instincts every day, without even realizing they are doing it. Second, leaders must use the business planning and review process as a forum for attacking instincts. By shifting these discussions from a performance frame (judging mangers on the basis of performance versus plan) to a learning frame (systematically identifying and questioning assumptions), the business planning process can became a powerful engine for reshaping instincts for the new environment.

Great performers sharpen their instincts. Great innovators break them.

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