Forty percent of business executives trust their guts over data? I admit those survey results made me raise an eyebrow — but then I put it down again. False alarm.
Forty percent may be significant, but compared with what? Is that worse than last year? For all we know — at least from the press release, since I can’t seem to find the actual report — this could be a huge improvement for the analytics industry.
I’d like to know more about that 40 percent who prefer “guts” over data. How many used pure clairvoyance, and how many used aids like tarot cards, tea leaves and pig entrails?
If the survey had probed more — I assume it didn’t — it would have found the answer: Data is everywhere, and it’s often stored layer upon layer and called experience. “Guts” is another way to say, “I don’t know where I got the data.”
Even a lot of thought leaders in the analytics industry would admit to deciding by gut. Imagine if 254 of them were asked “guts or data for most decisions about your own business?” They decide every day things like whether they’ll attend this conference or that one, when to take a vacation, how to replace that failing keyboard, and whether to go to the mall with the wife or finish that damned course outline. What’s it gonna be, Charlie, data or guts? My gut says most would pick guts.
Here’s what the results do say: Sixty-one percent of those who opt for guts cited lack of good data — I suppose as in, “Hmm, no data. Let’s eyeball it.” Wouldn’t anyone say so? The survey’s base of 254 managers and executives working at companies earning $500 million or more in 2007 are no fools. (At least as reported here.) Sixty percent — apparently overlapping the first group — cited no past data, data that could show trends. Fifty-five percent gave the excuse that their decisions relied on qualitative or subjective factors.
Guts or judgement is a murky choice, but the results are total waste if the questionnaire forced respondents to define terms for themselves. Were respondents given the simple choice of analytics or “judgment”? If so, the “40 percent” results mean nothing.
To see why, look at the comments after Thomas Wailgum’s “To Hell with Business Intelligence: 40 Percent of Execs Trust Gut” on CIO.com. Most confuse analytics with tools, architecture, or Dilbertertian obstacles. So what did respondents really mean when they chose guts or judgment? Did some, for example, think of a bad interface and select judgement as a way of voting against the tool? We don’t know.
Only a few commenters, such as Kalido CTO Cliff Longman, try to untangle the false choice of guts-or-data.
Longman writes, “Managers make all decisions by gut feel (a mixture of experience, beliefs, observations etc.) — but if there is trusted data available for them to see, I think it becomes part of the ‘gut feeling.’ … Digestible data — good for the gut.”
Me, I use tea leaves. Good for the guts.
Also see Neil Raden’s “Gut Versus Analytics: What’s the Real Story?” and Marcus Borba’s “Several executives trust gut.”
Ted,
Glad you had some yogurt in Vegas. Long way to go for yogurt, unless you gut is telling you that nine times out of ten the yogurt in Vegas is to fly for.
In any event, on the subject of guts, take a look at this sort of related blog post from Franz Dill, a retired P&G researcher and innovator, who more people should pay attention to, after they read your blog, of course: http://eponymouspickle.blogspot.com/2009/02/gut-feelings-intelligence-of.html
Ted,
I agree that we need to see details about (or the actual) survey to decide how accurate these statistic are. I’m going to hope that by “guts” these folks mean common sense, or like you mentioned they just don’t have the data available to make a decision, so they have to go on their instinct.
What does blow me away though is the number of organizations out there who just don’t have any kind of analytics in place. I consistently see folks from the bottom-up trying to adopt and put into place a strategy for capturing analytical data and using it to their company’s best advantage, but it is not adopted all the way up the chain to upper management.
There are an abundance of business leaders out there who truly believe their gut instinct is always the way to go. They are reluctant to adopt the transparency that comes with good analytics.
I was struck by the number of writers saying that if the existing tools have failed to dispense with “gut” decision making that more of the same is called for.
I disagreed in this post:
http://www.b-eye-network.com/blogs/taylor/archives/2009/01/to_hell_with_business_intelligence_try_decision_ma.php
JT