Gut Versus Data: Making Decisions For Your Corporation

Posted on February 3, 2009. Filed under: Uncategorized |

Thomas Wallgum, an editor at CIO Magazine, had a recent article with a surprising admission from a study conducted by Accenture – 40 percent of major corporate decisions are made by instinct, not data.

This might seem surprising at first but it becomes more understandable considering that most executives receive data in hard-to-understand formats that require the expertise of a technical person to change in order to ‘ask another question.’ If the standard report is off target from a pressing question or issue, tough. At my last company, we had access to a database created by the Finance team via OLAP. It was next-to-impossible to change the reporting criteria, which made the data static and inflexible to meet the company’s changing needs—or more importantly the customers’ changing needs. And, no surprise, when you dig deeper into the CIO Magazine survey, it seems that 61 percent of executives felt that gut decisions were best because good data wasn’t available.

Even where traditional business intelligence solutions have evolved to more of dashboard visualization, they only focus on the “what”. As an example, if customer retention in Market X in Country Y is falling, you need to know more than the fact that this is the case – you need to know “why” it is falling which is something that only the unstructured data living in call center notes, CRM systems or in verbatim survey responses can tell you.

Despite the advances in dashboard visualization for structured data, 36 percent of executives felt their company lacked the analytical talent they needed to make use of the data they have. As these businesses start mining the unstructured data for the “why” the need for automated, easy access to that data, without any set-up, will be critical, as will the visualization capability to quickly get to the insights required.

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2 Responses to “Gut Versus Data: Making Decisions For Your Corporation”

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Chris, spot on. Executives need to have information they can act on, and they need to have ALL the information in an easy-to-use form. They need to be able to know “what the organisation knows” – what the reports and documents, notes and transcripts throughout the organisation are saying about the operation of the business – in order to be able to make the right decisions. I’m not saying that decisions based on gut instinct are the wrong ones – the many successful businesses out there testify to that – I’m saying if you have all the information to hand, in a neatly summarised form that you can understand and deal with, then your decision is going to be clearer, and probably easier to take and implement.

[…] on the effectiveness of “going from the gut” as a decision-making strategy. The Customer Insight blog notes an Accenture study that found 40% of senior executives relied on their gut for […]


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