Arguing for Increased Gut-feel in the Age of Analytics

According to a recent HBR article, an astounding 89% of marketers rely on their gut-feel when making decisions. As a Newcastle University Business School alum who runs marketing for Cambridge, MA-based analytics software company Talent Analytics, Corp, I rely on data to inform my decisions every day and this fact amazes me.

Yet, I’ve read blogs recently advocating for an increased reliance on using gut-feel in decision making. This argument in effect, wants to keep decision making status quo and firmly in the realm of the gut-feel rather than advocating for an evolution towards a greater use of analytics. This stance surprises and disappoints me. Considering decisions have been made solely gut-feel forever and is still used today by the majority of decision makers world wide in the Age of Analytics, shouldn’t we be arguing for the opposite?

Any executive that advocates for increasing reliance on gut-feel, anecdotes or intuition in decision making around people, whether it’s marketing or talent management, rather than using sophisticated analytics technologies available today to find trends and patterns in aggregate is missing the entire value proposition of analytics. They are also missing a huge opportunity to advance their function and organization. What follows are some reasons why you should not relysolely on your gut-feel in decision making.

Only using gut-feel is status quo decision making. Gut-feel is the very definition of old school and has been used in abstraction from analytics since people started making decisions. Relying solely on gut-feel is what the old school baseball scouts used in Moneyball to make judgments on players before Billy Beane introduced them to enhanced decisions with sophisticated analytics. Sadly, this is what many hiring managers today still do rather than should do.

Tip: As the Oakland A’s General Manager made famous in the movie MoneyballBilly Beane said at IBM IOD in 2011, “Measure the data that has the strongest correlation to winning games [the people themselves].” Beane does not rely solely on his gut-feel or anecdotes when signing players, he looks at trends in aggregate to make more certain decisions. This same concept can be applied to talent and customer decision making (as Talent Analytics CEO Greta Roberts points out in her recent blog, they’re both people after all).

Gut-feel does not scale. Reliance solely on gut-feel introduces bias and anecdotal evidence equates to simply relying on your gut in story form. Every customer and employee has different preferences – using your gut-feel about based on one customer or employee tells you only about that person and is completely impractical for scaling across a global enterprise.

Tip: Instead of relying solely on gut-feel, collect employee analytics internally and correlate people to business performance. This will enable you to spot trends and patterns in aggregate that will yield less biased and more effective people decisions. Consider analytics a way to inform your intuition.

Only relying on gut-feel is expensive. The cost of poor hiring decisions is well documented and frequently costs three times the employee’s salary.

Tip: Instead of relying solely on gut-feel during an interview that the candidate will be a good fit to the role, utilize analytics to identify how well the candidate will fit against an ideal job benchmark. A few minutes now could save a lot of time, money and aggravation later.

Gut-feel only compares to experience. Gut-feel can only be compared to your own personal experience. Is your hunch an anomaly or is it part of a broader trend of customer or employee behavior? Without more data your gut lacks context as you have nothing to correlate it to. For example, the looming analytic talent shortfall is a popular topic in the analytics community today yet thought leaders keep providing their own personal anecdotal evidence for what to look for when hiring these rare professionals.

Tip: Instead of relying only on gut-feel when hiring talent, compare your current team to aggregated data from the broader industry to make more certain hiring decisions.

Relying solely on gut-feel reduces certainty and increases risk.
No matter what your function or level, if your job involves making decisions around people, analytics can make your decision easier and more certain. Adding data to your decisions extends to every day life. For example, if your gas gauge is on empty, would you rely on your gut-feel about the one time you made it home on E? Or stop and add some gas to be certain you’ll get to your destination? In the same way your car dashboard works, business analytics is simply a numbers-driven way to advise you to make more certain business decisions. It’s not your only data, just more data.

Tip: As a marketer who relies on analytics every day to inform my decisions, I recommend using data to point to the behavior of most people rather than one person.

Analytics can be used to remove biases and inform intuition around people decisions by organizations of all sizes, including the midmarket. When analytics are used across functions and all levels of the organization to enhance everyday decision making it becomes an extremely valuable asset.

If you walk away from this with one thing, I’d encourage my fellow NUBS alums to join the progressive business people rapidly moving away from their old school reliance on gut-feel (thinking) and towards analytics (knowing).


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