Trusting Your Gut More important Than Ever

Researchers at Northeastern University conducted an experiment that involved subjects flipping a coin to see which of two tasks they would be asked to perform. One was short and enjoyable. The other one took longer and was more tedious.

Guess what percentage answered honestly when asked which side of the coin they got? Only10 percent. Others didn’t bother flipping the coin at all or just kept flipping it until they got the side with the easy task.

That’s just one study of many studies that researchers have been conducting to understand business ethics and why people behave the way they do. The sad reality is that while many of us still value integrity and dealing with people honestly, we can’t always count on co-workers or others we are conducting business with to behave in an honest fashion.

That’s why it’s even more important than ever to trust your gut in business dealings. You know that feeling — when something is just off and doesn’t add up.

Maybe you’ve been presented with a proposal for your business and while all the numbers and testimonials about the new service seem legit, something about it just doesn’t feel right.

Or your sales manager is offering an explanation for why his salespeople aren’t meeting quotas. You listen to what he’s saying, and while it sounds plausible, your intuition is telling you something is off.

We are most likely unconsciously calling up past bits of information that together have led us to that conclusion.

Our brains are wired to retain these bits of information and link patterns into clusters of knowledge. I learned a new term for this process of gathering information into meaningful groups. In psychology it’s known as “chunking,” a term coined by the late social scientist Herbert Simon PhD.

“When you see a tiny detail of a familiar design, you instantly recognize the larger composition—and that’s what we regard as a flash of intuition,” according to the article “When to Listen to Your Gut … and When Not To.”

When you can’t really put your finger on why something doesn’t seem right, that’s your gut talking to you. And that’s something you need to pay attention to.

As Mario Cuomo said, “Every time I’ve done something that doesn’t feel right, it’s ended up not being right.”

Over my 30 plus years in my career as a turnaround authority, trusting my gut has worked to my advantage in so many situations. Sometimes it’s when I meet with prospective clients and I can tell they aren’t really committed to making the changes that will be necessary to meet the desired goals. If I worked with them, we’d both end up frustrated.

I also trust my gut when I sense there will be a personality conflict with someone and again, we won’t be able to meet our goals if we don’t have a smooth working relationship. Although I generally get along with everyone, every now and then I sense that won’t be the case.

I also have a fairly good sense of when someone is lying to me. My job involves talking and listening to a large number of people, at all levels of a company. It doesn’t matter what their position is at the business, I can often tell if they are lying to me or just not telling me the whole truth.

While we often can’t explain our intuition or instinct, we know it to be a powerful thing. As Ralph Waldo Emerson said, “Trust instinct to the end, even though you can give no reason.”

Learning the Family Business – In a Classroom

While many college students due to graduate in 2013 are stressing over finding a job, a lot of students already know where they will be spending their days after turning the tassel on their mortarboard. The family business.

Family businesses employ 62 percent of the U.S. workforce. Two out of five Fortune 500 firms are family businesses so every year thousands of recent grads will join family members in the workplace.

A lot of colleges, particularly those with entrepreneurship programs, are responding to the large numbers of young people who are taking that path by teaching courses on managing family-owned businesses.

urlAccording to a recent article, Northeastern University launched a class in 2011 and Rice University in Houston and University of Denver have recently launched courses.

New York University added an undergrad course on family business this semester and Savannah State University will add one next year. Some schools, including Saint Joseph’s University in Philadelphia, have family business majors.

It’s probably a lot easier to get the parents to foot the bill for tuition when it’s an investment in the future of the business as well as in their kid.

Students who are juggling multiple interviews, nervously waiting for calls for a second interview or contemplating the horror of moving back into their 1990’s-era childhood bedroom under the draconian rules of mom and dad may be feeling a bit envious of their classmates who never had to answer a question like, “Where do you see yourself in five years?”

Those kids won’t be sitting across the large wooden desk of some executive asking, “Tell me about yourself.” Their future employer changed his or her diapers or watched them blow out candles on multiple birthday cakes.

While these young folks slotted to join the family business may not have to worry about finding a job, they have a lot to deal with when it comes to actually doing the job and maintaining family relationships.

You can quit a company and never hear from them again, with the only reminder the W-2 you’ll receive the following January. But you can’t quit your family.

I write a lot about family business in my new book, “How Not to Hire a Guy Like Me: Lessons Learned from CEOs’ Mistakes.” While it’s true that family businesses make up a majority of those in the U.S. and can be extremely profitable — take Walmart for one — they involve additional complications. Why do you think so many companies have anti-nepotism policies?

In my work as The Turnaround Authority, I have often been called in to run or consult with family businesses and have seen all the difficult situations that can arise when you mix family and business.

There can be issues of family members in the wrong jobs making poor decisions, questions of favoritism and bad morale among the staff for non-family members. And if you think it’s hard to fire any employee, think how much harder it is to fire Uncle Ned, especially when he and Aunt Irene host Thanksgiving every year.

No matter how many classes you take, you can’t learn everything you need to know to run a family business. Or any type of business for that matter. But taking courses in topics such as family succession and governance can be beneficial to students.

One young man mentioned in the article is Tony Holzbach, who is taking classes at Texas Christian University and will one day take over a wholesale and retail garden center in Forth Worth that his parents started 30 years ago.

He wasn’t too sure about what he could learn by taking a class and thought his dad knew everything about the industry. But after just a few weeks, he said, “I have discovered that there is much more to family businesses than I had realized.”

Just getting someone to admit that there’s a lot they don’t know is a great first step.