For many companies, the beginning of January is a flurry of activity, as organizations swiftly move from developing plans to implementing them. You’ve spent the past 3-6 months in strategic planning, and you’re itching to act. It’s a lot of work, and it has to make you wonder –…..
Is it all worth it?
It’s a valid question. I know many of you are frustrated with annual plans that tie up resources and budgets with little wiggle room for innovation. Customer behavior changes. New tools and technologies launch — and you’re stuck implementing a strategic plan based on old information. Let’s imagine for a moment that these current limitations don’t exist. How would you find ways to gain market share, drive revenue and satisfy your customers? Will you rely on your instincts or will you make decisions based on data and analytics?
That’s not a trick question. Companies and leaders place different values on the role of trusting their instincts vs. letting data be the driving force behind their strategic decision-making.
In an era of #BigData, what role does instinct have in corporate decision-making?
The answer is: probably not enough. With an increasing level of chatter around the importance of data-driven decision-making, the role of “gut instinct” has taken a backseat to tracking your customers’ digital footprints across the Internet. The result can add up to months and months of analysis paralysis — and lost opportunities.
OK, so I know what you’re thinking. “Wait a minute. Are you saying that I should just ignore the data and solely rely on my instincts?” Let me put your mind at ease. I’m NOT saying that at all. What I am saying is that understanding human behavior and making educated assumptions about the “why” is more important than tracking the number of fans, site visitors and clickthroughs. Understanding why people behave the way they do can lead to creating more meaningful experiences, but you won’t find the answers to those questions in a spreadsheet. Imagine what would happen if Apple had relied solely on customer data and input when they were creating the first iPod, or the iPad. No data was going to tell them they needed to create these products. They had a vision, an instinct, and they went for it. And it paid off.
But we’re not all Apple. And making decisions solely on instinct can get you into a lot of trouble, particularly if you ignore the data that is readily available to you on a daily basis. I have to believe that Blockbuster Video saw the signs that their business model was in jeopardy LONG before Netflix was even in beta. Did they really believe that this start-up would eventually put them out of business? If they paid attention to the warning signs of changing customer behavior, declines in new memberships, store traffic, etc., they might still be around today. But their instincts, or quite possibly their egos, refused to believe what the data was telling them.
Intuition and data-driven strategy can absolutely co-exist peacefully.
The key is not to over-think it. Use the data to help you identify a particular business problem. Use your collective knowledge and experiences to create hypotheses about the “WHY” and find ways to solve that problem. Sell the vision internally, and use data to help support it.
Will this get you out of developing business cases for projects or initiatives? Not exactly. But the extent of those data-gathering exercises should be relative to the impact of the project.
Consider these questions when identifying how much effort should go into data analysis:
1. What’s the impact if it succeeds?
2. How complex is it to implement?
3. What’s the risk if it fails?
Evaluate your initiatives based on these simple questions, and quite soon it will become apparent where you need to spend your time building business cases.
Most importantly, don’t let your ego get in the way of making the right decision.
We all bring unique experiences to the table and as a result, can have biases that may or may not be relevant. Have a strong point of view, but be willing to listen to your customers and learn from their behaviors. The difference between a successful plan and an unsuccessful one is aligning around a strong vision, likely driven by instinct, but being willing and able to quickly adapt as necessary to changing customer demands.
Where do you personally fall on the spectrum of data vs. instinct?
We each have a natural tendency to align more on one end vs. the other. Reach outside of your personal comfort zone to see the value in a different perspective, and you’ll see the impact in your 2014 business results.
The start of a new year brings the promise of positive change. Will you embrace it?