Hailing the Eureka Factor

By Barbara Rudolph

Are American businessmen too rational and restrained for their own good? In a world where the M.B.A. is a major status symbol, executives are deluged with exhortations to plan ever more precisely, to analyze ever more rigorously. Veteran Business Journalist Roy Rowan, however, has some refreshingly different advice. In The Intuitive Manager (Little, Brown; $15.95), Rowan, a longtime correspondent for LIFE and TIME and for the past eight years a FORTUNE editor, celebrates what he calls the Eureka factor, the sudden, illuminating flash of judgment that actually guides many business leaders.

Logic is only one part of decision making, Rowan contends; it is often the daring, instinctual leap that can make all the difference. "Hunch is an odious word to the professional manager," he writes. "It's a horseplayer's . . . term, rife with imprecision and unpredictability." Yet the hunch continues to be a major managerial tool. Salting his argument with lively anecdotes and conversations with some 70 chief executives, Rowan makes an impressive and entertaining case.

As he sees it, intuition, at least the successful kind, is something more than vague presentiment. The sifting of personal experience is an important part of the intuitive faculty. Rowan approvingly quotes the late Joyce Hall, founder of the Hallmark greeting-card empire, who called memory "the vapor of past experiences." Successful managers, Rowan recounts, have found some unusual places in which to enjoy those fumes. McDonald's Chairman Ray Kroc opted for a 700-gal. waterbed on which he and his aides plopped to think.

Rowan counsels that an ingenious business idea is usually the "final stage of a slow fermentation process." He cites the birth of Federal Express, the company that created the market for overnight mail delivery. The idea for the business first came to Founder Frederick Smith while he was a student at Yale writing a term paper on the parcel-service system. Much later, while he was flying combat missions in Viet Nam, Smith developed his notion of an "absolutely, positively overnight" service.

A formidable enemy of intuition, according to Rowan, is "analysis paralysis," a condition caused by too much inquiry. "Constantly accumulating new information . . . without giving the mind a chance to percolate and come to a conclusion intuitively can delay any important decision until the time for action expires," he says. That is "substituting study for courage." He advises executives not to fret about their lack of experience. Rowan recalls that King Gillette was a bottle-cap salesman when he dreamed up the safety razor. Concludes Rowan: "Inexperience may make us more daring."

On the other hand, when executives confuse intuition with fantasy, the results can be disastrous. William Agee, the former chairman of Bendix, may have confused the two during his abortive 1982 campaign to take over Martin Marietta. Marietta later rejected Agee's offer, and Bendix was devoured by Allied Corp.

For all the current emphasis on scientific management, Rowan concludes, the Eureka factor is likely to remain important in the history of business achievement. Says he: "The biggest winners tomorrow will be those who can summon from somewhere deep inside themselves . . . intuitive flashes of the business opportunities that have yet to surface." There will always be a place, in other words, for old-fashioned entrepreneurial spirit.