Every day as a business leader, regardless of the size of your business, you make gut decisions. I remember once in a management meeting at Chili!Soft I pushed the idea of licensing the software through ISPs. Somebody said something like “Yeah, but that’s just your gut."
When I’m in the game, I read constantly. I read trade magazines, business magazines, tons of blogs and websites, books, and just about any other material. I participate in trade show; I don’t just attend, I’m the guy talking to every company exhibiting, grilling them on what they do and how they do it, and then I’m the guy that grabs the microphone and peppers the panel with tough questions. I’m obsessed with knowing as much as I can.
So when someone says “Yeah, but that’s just your gut,” I say “gut is informed intuition”. You gather as much information as you can. If you’re smart, you’re organized about it and store the information so it’s easy to retrieve and reference and easy to share with your team.
Then you analyze what you’ve learned, and decide on a number of paths to take based on what you’ve learned.
And that’s where gut comes in. Your gut—your informed intuition—tells you to launch a new product. Or that you need to change the way you greet people on the phone. Or that you need to raise your prices and reposition. Or that you need to simply rinse and repeat, expanding on what works.
You can’t predict the future, but you can know as much as possible about your customers, how they perceive you and your products or services, what potential customers think of you and your services, what marketing efforts work and what don’t, what the overall economy is for your sector, and what your own capacity is for moving forward.
So now you’ve come to your conclusions. What remains are decisions: go left, go right. Hunker down and ride out the storm, or go out guns a blazin’ (yeah, that was me once. Didn’t work).
The decisions come down to your gut. You can and should feel pretty confident about the risk of making a specific choice if your gut is highly informed. When you’ve made your decision, list the assumptions on which you’ve based it so you can test and validate it.
You’ll learn a tremendous amount, and be able to apply that knowledge toward improving your products, services, future decisions, and your decision-making process.
So know your business. Know your competitors. Know what the leaders do well and what they don’t do well. Know what your competitors customers think about them, and then ask your customers think about that. I’m amazed that more companies don’t ask their competitor’s customers about their perspectives.
Your gut is always stronger and more accurate when you've done your homework. The only caveat is this: know when to stop. You don't have to read every last post on TechCrunch or Business Insider (or whatever your trade rag is). There's a point at which you're pretty well saturated and anything more is a waste of your time.