Gut feel is a really hard kind of concept to quantify. What I found is that Gut feel is always 100% right. Your Gut feel doesn't lie to you. Authentic, analytical, empowered. Laura Huang is a professor of management and organizational dynamics at Harvard Business School and the Wharton School of Business. Where do you see yourself going? Where do you see this company going? She's a Wall Street Journal bestselling author. Her book titled Edge, Turning Adversity into Advantage, outlines her research about how being underestimated can be your greatest asset. Find a good mentor. When you know how you enrich and delight and guide, that's actually how your effort and hard work work harder for you. Laura's mission is simple. To help entrepreneurs and leaders turn setbacks into fuel, creating opportunities where others see obstacles. Named one of the top 40 business school professors in a thinker's 50 global mind, Laura is a front runner in the field of business education. Today we're going to talk about finding your edge. She also leads the Women's Entrepreneurship Initiative and specializes in studying the unmeasurable factors of business, like gut feeling, bias, and leverage. Get ready. Today's episode will teach you how to achieve success and overcome obstacles in the workplace. All right, guys. Welcome back to the Mellow Millionaire. Today I got an awesome guest. I've got Laura Huang with us. Laura is a Harvard Business School Professor, the bestselling author of Edge, Turning Adversity into Advantage, and a leading voice on how individuals can shape their own success. Known for her groundbreaking research on entrepreneurship, bias, and leadership, she helps people discover how to make their unique strengths stand out in competitive environments. And I love your book. You already know the science of mastering your intuition. It's right here. It's a pleasure to have you on, Laura. Thank you. It's pleasure to be on. So just tell us a little bit about what you've been really researching. When I first became a researcher after I left the corporate world, I really wanted to understand something pretty simple and success. I wanted to understand what makes people successful. And so I started trying to figure out, what's the definition of success? What does success mean to all of these people? Everyone from the sort of traditional definitions of success, right? So I interviewed Olympic gold medalists, world record holders, CEOs of companies, entrepreneurs who had taken their companies public, all the way to the non-traditional definitions of success, right? So formerly incarcerated individuals who were able to get back on their feet, women who had been out of the workplace, and were able to get back on their feet, people who had gone bankrupt multiple times, but were able to then turn themselves into these tremendous financial successes. And everything in between. Every single person that I interviewed, 100% of them, said that the secret to their success was hard work. And yes, every single one of those people, when I scratched under the surface a little bit, admitted to me that hard work alone was actually not enough, right? That it wasn't about hard work. That you could take two different people, and they could work equally as hard, and one would inevitably be more successful than the other, right? And why is that? Well, it's because there's all sorts of perceptions, and signals, and cues, and things that are happening out there that have nothing to do with hard work, right? That's not to say that hard work is not critical, but that's table stakes, right? Hard work alone was not enough. And so what I found was that actually what made 100% of those people successful was that they were able to gain an edge. So they were able to kind of flip things in their favor and gain that edge. And so that was my first book. My second book, which is kind of a precursor to that, is the notion that the people who are able to gain an edge, one of the key pieces of that is their ability to really harness their gut feel, that they understand, and that they can hone, and harness, and even train their gut feel, where they can take their experiences, and their expertise, and their culture, and their background, even their trauma, and combine that with data. His data is a part of gut feel. We can talk about that. A lot of people think that data is not a part of gut feel, but it is. And that if you combine these experiences and this data, and that would give you a gut feel that you could trust whenever you were making these tough decisions in your life. And so that's really kind of a background on my research. And what I have been doing for more than 16, 17 years, I was trained as an engineer. And so what I've really tried to do is quantify, using my engineering background, quantify the unquantifiable gut feel intuition. How do you actually quantify that? So that's what I've tried to do. And so my book really is about the science of intuition. I love it. So in the book, you talk a little bit about subconscious. And I think we're probably working with 3% to 5% of our brain, just there's so much going on. What's the best way to tap into that? And how does your, you mentioned three different types of what this looks like when we use intuition or the gut feel. Can you just talk about that a little bit? We tend to think about things sometimes, in a way that's very linear. We read books linearly, page one, page two, page three. We talk about our experiences on our resume in a linear way. I did this and this and this. And yet our intuition is not a linear at all. It could be one piece of data that we encountered today that makes us think about something that happened when we were in high school or something that was really formulated when we were five years old that we realized we enjoyed doing a particular hobby or something. And those things are sort of combined. And so gut feel really is this flash of clarity. And so how do we recognize that flash of clarity? And so what you're talking about is those three manifestations of our gut feel. So the first is Eureka moments. Eureka moments are sort of those aha moments. You've been struggling with the problem, for example. And then you're in the shower and the solution just comes to you. These kind of aha moments. So that's the Eureka moments. The second is a spidey sense. It's more of a uh-oh kind of feeling. You're considering a deal and it looks great on paper. And there's something. You're like, oh, I don't know why, but this just feels off to me. And then the third type is what's called a jolt. And that's more of a it's not an aha moment and it's not an uh-oh moment. But it's more of like a whoa. It's a jolt. You're jolted out of what you thought you knew. It's completely changed the foundation of what you thought you knew. And now you think of it completely differently. And so these are the ways in which our gut feel manifests itself. These are the flashes of clarity that we have. And yet individually, your Eureka moment might present itself to you very differently than my Eureka moment might present to me. So your Eureka moment might be like, you might get a feeling of excitement. And your hands might start to like, you might have sort of this nervous energy. Whereas my Eureka moment might be like kind of a stillness or like a, or maybe I feel it in the pit of my stomach or something. So individually, we feel our gut feel differently in terms of the emotions behind it, the physical sensations behind it, the cognitive awareness behind it. And yet we can start to hone it and train it by recognizing that there are these three types of gut feel that we can rely on. You know what I was reading the book, I kind of was thinking about how do I reverse engineer, you know, for example, private equity, right? If you were to go study Blackstone's most successful deals and go meet with those owners and find out and not change who you are, but maybe accentuate the things that they really fell in love with with this great ROI. Is there any way you'd want to make them kind of think, well, this reminds us of this other deal with this CEO because he's a lot like them. Has there, have you ever heard of anybody trying to do something like that to try to get them to say, aha, this is a success story because we know what's going to happen with this? What's interesting about that is that my dissertation was looking at gut feel in investment decisions. I was specifically looking at venture capitalists, angel investors and how they make their investment decisions. And one of the reasons why that context in particular was so interesting to me. There's a lot of uncertainty. There's a lot of complexity. And even though when we are thinking about these investment opportunities, we tend to rely so much on the hard data, right? The financials, the business model, all those sort of things. Well, what we actually do is we made these decisions based on what you're referring to. What these investors are actually doing is post-hoc rationalizing and finding the data to support what it is they wanted to do anyways. We understand that these are complex and chaotic decisions where we do need to rely on, like I said, our patterns, our pattern recognition, our prototypes, thinking like, OK, here's where it reminds me of this other investment deal that we've made. And this is where that training of our gut feel is so important is that we also need to make sure that we're not falling prey to what I call situational arrogance, which is that, oh, something worked in the past. And so now I'm going to import that exact same mental model and use this in this new context. And not recognizing that maybe there's a key variable that might have shifted. And when you change one variable, the entire equation now is no longer the same. There's a man named Ron Johnson. I don't know if you've ever heard of him, but he was the CEO of JCPenney, right? And what he's sort of known for now is that he's even been dubbed the biggest business failure of the 21st century because he basically stepped in as CEO of JCPenney. And within 18 months, he was ousted by the board and the company went bankrupt. But what we forget is that Ron Johnson was an incredibly, incredibly successful businessman before he stepped in and took the helm of JCPenney. So he started out at Target, and he is literally the man who was responsible for the Target as we know it today. He was the mastermind behind turning Target into what it is. But it wasn't just Target. After he left Target, he went to Apple. And at Apple, he's responsible for the Apple stores as we know it today. He was tremendously successful with Target and with Apple. So then why was he such a disastrous failure at JCPenney, right? And it was because he felt prey to situational arrogance. He missed the key, which is that all of the loyal customers who really liked to be there shopping with their coupons and going there for back to school shopping, shopping with their Easter dresses, for their Easter dresses, all that. He had missed a key variable. And so if we go back to sort of the investor context, yes, it can be a tremendous asset, but we need to be able to train ourselves so that we know the difference, so that we know where are these patterns coming from? What is our mental model telling us? What is it that I am trusting and relying on so that when I'm making these decisions, I know that they're the right ones? You know, that happened with Coca-Cola too, when the CEO came in and changed the taste, they had to go right back to it. And the idea of Uber and Apple and all these companies is these CEOs and founders, they just, they kind of make their own luck. They got a way to get around hard obstacles. Like I think you've mentioned in the book that it was just very hard for Uber because a lot of laws would have to change and it would have to go through Congress and there would have to be a totem, like the stuff that's coming out now. And how do you create your own luck? Mark Cuban said, if you're a billionaire, you got lucky along the road. Yeah, and I think that luck comes from action, right? Being lucky is about taking action based on your gut feel. The thing that we sometimes miss about this, right, is that gut feel is a really hard kind of concept to quantify, right? When I was, you know, the science behind it is really tough because we all have a lay view of what, like we all know what we think gut feel is. We all have kind of a lay view of it. What I found is that gut feel is always 100%, right? Your gut feel doesn't lie to you when you use it for the right problems or you use it for the right questions. And investment decisions fall into that category of complex and chaotic decisions, which is to say that even if you've gathered all of the data that you could, right? All of the data on what's the, what are the focus groups say about this product? What's the competitor's face look like? What do the financials look like? You're not going to be able to ever have all of the information to give you a probabilistic definitive yes, no answer because consumer preferences change, competitors change, strategies change. All of these things are really dynamic. And that's where you have to rely on your gut feel. I think, you know, if I think about my own success, I think a lot of it is just not being afraid to fail. I think a lot of it is just, it's a speed bump. And I embraced failure because I'm like, well, we learned from that, we're not going to do that again. And then all of a sudden you have these stories of failure that just, you took the wrong road so many times. And I was talking to Nick Saban and I asked him, I said, is it Willer's skill? He says both. And so I think it is both. It's like nature versus nurture. You got it, your brain's got to be able to function at a high level to make complex decisions. And that Will's skill is the same thing is that hard work alone is not enough, right? You can, right, you have to, there's something else. It's critical, but you need both. I had a mentor ask me this question and he said, Tommy, you know, most people want to grow 30% year over year, you know, August versus August, whatever that might be. He goes, if I asked you to 20X your revenue and profit next year, he goes, close your eyes. And he said, what would need to happen if you were going to 20X? And right now we're going to do 300 million this year. And so 20X, I have to do 6 billion. But if you wanted to 20X, whatever it is, how would you go about what are some of the things you would have to think about? Because that is like, you got to think way outside of the box. Yeah, I have a very simple answer for you, right? When you think about 20X, what's 20X? It's a home run. You don't hit a home run without striking out, right? And so in order to get 20X, I need to have 19 complete losses that I'm completely okay with, right? And the reason why is because if you think about portfolio strategy, there's one strategy, which is you're going to take every single individual investment, all 20 of those investments, and you're going to try and have a positive ROI on all of those things. That's a very different strategy from, I need to just have one of these. One of these be a 20X. And in order to get there, you have to be willing to have 19. The other 19 of them be complete losses. In the hopes that that one is going to be a 20X or even a 200X or a 2000X is going to be there. So you're swimming for the fences. And by swimming for the fences, that means that a lot of those swings are going to be complete withs. And so that would be the way that I would think about it. And that's the way that I think. Venture capital. Right. It's the venture capital model. And those who had actually accomplished the 200Xs or the 2000Xs, they also had to kind of adhere to that belief and that strategy. 100%. I mean, we have, I got an event next week with Kevin O'Leary. And you hear these stories about these investments on Shark Tank. And a lot of them don't go well. In fact, you know, a lot of them had one go extremely well that they're like, I hope I broke even. I hope I broke even on all my investments. When you're on Shark Tank and the types of deals they are looking at on Shark Tank are all very consumer B2C type of, type of, type of deals. Because it has to be something that's, that's interesting to kind of a mass market. It has to be something that is media wise, television wise. You know, I think in terms of their rate of return, I'm sure that all of the sharks and, and, you know, especially, you know, like Barbara, you know, if you look at some of her investments as well where she's really, really successful is she uses her gut. She uses her gut all the time. She's, she's one of my favorite people in terms of like as, as like a spokesperson for, for using music or, but you know, keep in mind that that Shark Tank is like that very particular niche type of investment. Laura, so what's one piece of game changing advice you wish you knew in your 20s? No, one of the pieces that I talk quite, quite a lot about in terms of gut feel is this notion of listening to what whispers. And not what screams. Right. I don't think we do that often enough where we listen to what whispers instead of what's screaming. And there's so much out there that is screaming at us in our society nowadays from algorithms, AI, machine learning, all these things. We don't even get to pick the next YouTube video that we want to watch for ourselves because it's getting recommended to us. Right. And how do you listen to what whispers? How do you make sure you continue to listen and not shove away that whisper? It's by keeping the main thing, the main thing, like remembering what that is. And so you're always kind of subconsciously keeping your ear out for what's whispering to you. I do that with long walks, just quiet walks in nature. And you talked about getting in a quiet room and just meditating. Absolutely. Yeah. Yeah, absolutely. I love it. What is one of your millionaire habits that sets you apart from the rest? Probably that I put controls in place for myself as I weren't as an investment banker. I didn't have a particular affinity for finance or investment banking. In fact, I went into it because I was finishing up school and I had all these student loans that I had to pay off. And everyone, you know, I asked all my friends, I said, what's the quickest way to pay off student loans? What's the quickest way to pay off student loans? And they all said go into investment banking. Right. And so I was like, okay. So I went into investment banking to pay off my student loans. But I sort of knew that I wasn't going to love it. I wanted to be a professor. I wanted to get my PhD, but I quit it because of these loans. And so I started at the bank, started paying off student loans. And on the one year anniversary of being at that bank, I had an outlook calendar invite. There was a note that I had written to myself that was saying, you know, here's your goals. Here's what you're thinking. Here's why you started working at this bank. But what you ultimately want to do is, you want to get your PhD, you want to become a researcher. And then I went back to work. On the two year anniversary of working in the bank, I had the same outlook appointment thing on the two year anniversary pop up with the same note. But this time I also had a resignation letter that I had pre written that was attached. And I reread the sort of note to myself. And that day I submitted my resignation letter. Right. And the reason why I tell the story is because it is so easy to get caught up. Like I said earlier, in the next bonus, the next thing that's best stayed the project where people are depending on us. And what happens is we end up decades later saying, you know what I really wanted to do in my life was X. Why didn't I ever do that? Why am I now like, you know, 60, 70, 80 years old? And I found that time has just passed in like the blink of an eye. You gave me goosebumps there for a minute because I was just thinking there's so many kids that are graduating or just get their four year degree in communication or foreign language or a few different degrees. And they're like, I still don't know what I want to do. What I tell people all the time, you don't need to know what you want to do. You just need to go for directionality. And by going for directionality, what I mean is you need to know what quadrant you want to end up in. Right. You already know enough about yourself to know whether or not you like being around lots of other people. Or if you prefer to sort of think with a smaller group of people or by yourself, you already know whether or not you want to create a huge set of business versus whether you're going to be better or more okay with like a lifestyle business. You already know whether you're more into sort of the numbers and the quantitative or whether you're more into the behavioral and that right. And so just go for directionality. And if you go for that directionality, you will not you're not going to end up at any one specific point, but you're going to end up very, very content and happy because you've gone in the direction of what is your main thing. Most of the time, if you look back at the people who have accomplished something really, really big, that was not the precise goal that they were seeking. That was not the precise thing. Even the Olympic gold medalists that I have interviewed, a lot of them it was they didn't get a gold medal in the particular event that they thought. They thought they were a long distance runner and they ended up winning it in the 400 meters or whatever that is. Go for directionality. How much do you believe in like sitting down in a room and say like I'm 42 and really identifying what big things I got Jesse Itzler's big ass calendar. Like what are some non negotiables? What do I want to manifest? What did I do if I died when I was 45? What did I do when I was 42? Hopefully I can manifest to when I was 90. What did I do every year? But really like visualizing. I mean, I think that as a society, we have made the wrong things high status. And the reason why we made the wrong things high status is because we are listening to all of the things that others are telling us are our high status. And so I think the benefit of that is you really are thinking about what it is that you in particular want. What is it that you want and how does that. So it's more of an outside in kind of philosophy, right? So, you know, it's, you know, I think about it as like, you know, there are people who you see all these people sometimes and you're like, okay, you've heard the thing where like fame just sort of fame emphasizes or it what was already there anyways. And right. And I think that's because people didn't know what they wanted along, along the way. And so I think that exercise where you're giving yourself that space, that time to really think about what it is you want, what it is you value. It's like having a dinner party where we fill it with seats of people whose advice we value and people we trust, but we don't do the equivalent of saving one of those seats for ourselves at the dinner party. Is there a book that really like impacted you? Yeah, I mean, gosh, so, you know, one nonfiction book that I really enjoyed is called When Breath Becomes Air. It's by Paul Kalanithi, the late Paul Kalanithi. And so that's one book that I thought was it's very, it's very academic in part one, but part two is sort of really opens itself up. And then last thing, and then we'll close it out. I just want to give you a chance for whatever you want to tell the audience to close the cell. I mean, I mean, I would close out with a you really can do this, right? You know, there's so much at us telling us that we can't do it, but trust your guts. Trust your gut, hone it, harness it, train it. You can, you can train it. And once those doors are open, right? Anything is anything is possible. So, you know, I'll close with the title of my book, you already know, you already know. And so trust that. Laura, thank you so much for taking the time today. This was an absolute pleasure. Yeah, same, same. Thanks so much. I appreciate you. You have a wonderful day. I'll send you off to your next meeting. The more we go through is meant to grow us and the harder the obstacle, the more we grow. The more frustrating things are, the faster you grow, the better things work out for you in the long run. Here's the truth. Every step you take in life, good or bad is preparing you. Every challenge, every setback, every struggle we go through in life teaches us a valuable lesson. I've had so many bad things happen that turned out to shape my life in the best way possible. I'm curious what things are going on in your life right now. What struggles, what challenges that are going to define you in the future. And that's it guys. We'll talk to you next week.
