Despite the logic of using data to complement or drive decision making, the business and mainstream press continue to glorify intuition and "gut" decision making by managers of all stripes. Where does this leave "data-driven" approaches?


A recent article in Fast Company titled, "Going for the Gut," details how even though we like our "heroes to crunch the numbers, we (also) like them to play their hunches." Author Rob Walker laments that books like Malcolm Gladwell's Blink, Jack Welch's Straight from the Gut and others, give gut decision making first billing over a "careful, rational, empirical" approach.

Walker asks, "Are the narratives of popular culture dominated by super rational heroes triumphing over seat of the pants, gut-trusting bad guys? Actually, it's the opposite: from Captain Kirk to Indiana Jones to Rambo to Tony Soprano–we're drawn to the character who follows the hunch and wins."

And business press and mainstream media largely agree. After all, wouldn't you rather read about the business executive who had the right hunch and made millions, as opposed to the quant-jock who crunched the numbers and came up with the winning combination?

Gut decision making is "in" and for lack of a better word–cool.

Some senior executives have alluded there's a mystique to gut decision making–those who have it have it, and those who don't will never ascend the ivory tower of business success.

Case in point, Ralph Larsen, former CEO of a large consumer product goods company, states in a Harvard Business Review article, "When to Trust Your Gut," that "very often people will do a brilliant job up through the middle of management levels, where it's very heavy quantitative in terms of decision making. But then they reach senior management, where the problems get more complex and ambiguous, and we discover that their judgment or intuition is not what it should be."

I do agree with Mr. Larsen that data driven decision making works best when there is in fact "data" to analyze. Sometimes, senior level decisions can be challenging because situations might be in uncharted territory–and there's no past data, or too small a data set for analysis or prediction. That said, I'm not convinced that good judgment and intuition is the sole purview of senior management.

There is hope, however, that a data-driven approach can work just as good as gut thinking, and in most instances–compliment it.

Recent books, "Super Crunchers" by Ian Ayres and "Smart Enough Systems" by Neil Raden and James Taylor show case study after case study where companies and government entities of all sizes are using data analysis, experimentation and analytical applications to make smarter and faster decisions.

And the business press also seems to be noticing. In the same Fast Company issue (November 2007) executive Matt Carey cites how he's attempting to create a "culture of analytics" at eBay, where experimentation, data and testing rule. "I want to eliminate feelings," he says, "and get down to true math."

If 2007 was "The Year of the Gut", perhaps 2008 will be the "The Rise of The Quant Jock."

Well, "quant jock" might not be the best terminology, and "analytics" might not be the sexiest noun, however running the company and making decisions based on the hard facts and numbers is something that I believe will never go out of style.

* Have you seen other examples of the "glorification of the gut"?
* How is decision making approached in your company (and in your marketing department)–by the numbers or by the gut? Do you see a trend one way or another?

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ABOUT THE AUTHOR
Paul Barsch directs services marketing programs for Teradata, the world's largest data warehousing and analytics company. Previously, Paul was marketing director for HP Enterprise Services $1.3 billion healthcare industry and a senior marketing manager at global consultancy, BearingPoint. Paul is a senior contributor to MarketingProfs, a frequent columnist for MarketingProfs DailyFix, and has published over fifteen articles in marketing, management, technology and healthcare publications. Paul earned his Bachelors of Science in Business Administration from California Polytechnic State University, San Luis Obispo. He and his family reside in San Diego, CA.