Intuition or Reason

Large do-it-yourself company Home Depot abandoned their Chinese expansion plans in 2012. Chinese people don’t do-it-themselves. In 2006 American retail giant Walmart left the German market. Germans favored smaller retailers and frowned upon the ‘service with a smile’ policy.

INTUITION OR REASON

Intuition Without Limits
Steve Jobs didn’t use focus groups to figure out if a new product would find a market and famously quoted: ‘A lot of times, people don’t know what they want until you show it to them’. Richard Branson said: ‘If I was a businessman, I would have never gone into the airline business’. Clearly, these are people with intuition. Financial and rational arguments did not influence them (to not do it) and did not limit their ambitions at all.

Intuition In a Box
From a young age Steve Jobs fiddled around with technology while already keeping a close eye on the end-user. Prior to Virgin Atlantic, Richard Branson traveled around the world while paying close attention to airline customers’ discomfort. In other words, Jobs and Branson could decide intuitively because they already worked with certain context.

Too much information
It is very likely that Walmart did significant research for its international expansion. In fact, it may very well have been too much information that blurred their sight. Regardless, I bet that there wasn’t one person of influence in the room with first-hand experience in Germany to provide context. The consequences can be measured in millions of dollars.

Blink and International Business
Sometimes an instant feeling is enough to make a good decision, but not always. Sometimes extra information is helpful, but can also mislead. Malcolm Gladwell’s book ‘Blink’ deals with ‘snap judgments’ with great examples and is a must-read for people in international business, where assumptions are formed with the blink of an eye.

Context and International Business
Without experience and expertise, a gut feeling can lead to false assumptions. Of course Germany and China are large markets. That is just a fact and not an intuition or gut feeling. To build on that fact with more facts without the proper context is assuming that everybody does the things in a similar way. But everybody in international business knows that ‘Everybody Does The Same Thing Differently’.