The 'Holy Grail' Equation for Making Quality Business Decisions
Wouldn’t it be great to know all the answers and to be able to make the right business decisions every time?
You’re the most senior person in the company; everyone around you is supposedly there to serve you, providing you with the information you request (or so you think).
So you’re expected to know.
In your role of ‘boss’ - standing on that pedestal - the ‘buck’ stops with you.
Everyone is looking to you for those strategic as well as tactical, ‘how-do-we-get-ourselves-out-of-this-mess’ decisions.
You can’t show uncertainty or weakness. After all, that’s why you’re there, right?
And yet…..why is it still so hard to find the answers?
All business leaders desire stability and certainty, because then; decisions can be made with more surety - with fewer elements of change.
But in this rapidly changing world, it’s almost as if yesterday’s data is already out of date.
When sales are hard to come by in a challenging economy, you need to stand out from the crowd.
Your team are looking for decisiveness and clarity of mind, but what’s really going on?
How can you make any sort of quality business decision without the facts?
‘You can have data without information, but you cannot have information without data’
- Daniel Keys Moran, Sci-Fi writer.
Quality data is essential to making informed decisions.
The goal for any business leader is to have the confidence that they are being provided with accurate data; to be turned into information, and then used to help provide the insight to make those quality decisions with certainty.
But what’s the difference between data and information?
The effective collection of data - with its subsequent analysis - drives:
improvement of customer engagement
the development of product innovation
And much, much more within the best run companies.
A recent survey of European C-suite executives, conducted by The Economist Intelligence Unit found that 55% of self-identified market leaders felt their decision making was based “purely on data”, but the most common approach was to lead with data, followed up with intuition and experience. (see chart below)
This is backed up by my own personal experience.
Years ago, when I was starting a business, I had recruited David Jones as my chairman (who was, back then, the highly successful CEO of the UK retailer NEXT). He told me that, when the board needed a decision, he would gather all the facts, take a bit of time and then go with his gut feel.
To illustrate this point, on an occasion during one of our key strategy discussions, he excused himself to go to the bathroom, left me alone for about 5 minutes and returned with a decision.
Around 70% of the CEOs interviewed in the same Economist survey referenced earlier, stated that their non-management employees were “somewhat” or “highly” effective at using data to support decision-making.
So it seems that the staff in these high-performing companies are also adept in the use of interpreting data.
So which comes first?
Highly successful companies attract data-driven recruits?
Or a data-driven culture results in a more successful company?
The research is not clear, but one of the common key effective elements in driving business success, is data:
With growing confidence in one’s own ability to make decisions, does that mean you are more likely to be right and can just go on your own gut ‘feel’?
According to Matthias Seifert, Professor of Decision Sciences at the IE School of Human Sciences and Technology in Madrid, it comes down to the quality, timeliness and context of the data.
In an effort to predict the success or otherwise of some new songs produced by well-known and newcomer bands, Professor Seifert surveyed 90 musical experts versus 90 graduate students without musical expertise, and tested these forecasts against computers.
For the well-known bands for which there was lots of historic data - the computers were more successful.
However, for the new bands, lacking the data to analyse, the computers struggled and the humans were more often right.
However, the best results were derived by combining the opinions of the musical experts with computers.
So, what does this tell us?
Human opinion should never be ignored when preparing the ground for business decisions.
It’s not just about the numbers.
Those highly motivated, talented employees will have insights of their own, and it is important to include these thoughts to provide validation and a cross-reference.
But don’t take too long - the world is moving forward, so find methods to capture sentiment and opinion efficiently.
Once you add these views into the mix, you’ll have the ingredients to make the correct decision.
So here we have proof that ‘holy grail’ for quality business decisions does exist:
Crunch the data; add cross-referencing human experience that is timely, relevant and in context, and then you’ll have the confidence that your ‘gut’ decision is highly likely to be the right one.
You won’t need to wobble on that pedestal, because you’ll be able to show that you know.
Paula Newby is a CEO of PREDIXA
PREDIXA helps business leaders to make more effective strategic decisions by rapidly analysing their organisation and pinpointing key issues for remediation using its powerful AI-based Dynamix suite of business applications for predictive analysis.