A recent study from FORTUNE Knowledge Group and gyro found that 62% of executives interviewed rely on subjective “soft factors” and “gut reactions” instead of objective data for decision-making. A summary of the preliminary findings (the full report is as-of-yet unpublished) on Mashable is titled Forget Big Data: Business Leaders Still Go With Their Gut, a headline that is as divisive as it is misleading. Opening with a fantastical fear-based premonition–“Do you ever worry that robots will one day run our major corporations, making dispassionate decisions based strictly on big data and cold statistical analyses?”–Mashable sets the stage for the seemingly never-ending intuition versus algorithm debate.
Here, I offer the painfully simple suggestion that maybe (just maybe) we need both, in tandem instead of at odds.
Consider for a moment my own personal eye-opening data-driven decision-making nemesis: The FitBit. The activity, sleep and calorie tracking device was re-gifted to me by someone who didn’t want it (rude), and now I know why. As a hyperactive yoga teacher with a Masters in Nutrition and the ability to sleep eight uninterrupted hours every single night, I thought for sure that there would be no way for this bracelet to tell me anything I didn’t already know about how splendidly healthy I am. What I learned, unfortunately, is that I am actually an immobile lump. Thanks, FitBit!
The FitBit’s cold, hard facts in the face of my misguided “expert” opinion about my activity level informed my decision to start taking daily walks at lunch. Bruised ego? Maybe. Better decision? Definitely.
But it doesn’t stop there. Where the FitBit falls short is with dumbed down data in its calorie-only food tracker. Any nutritionist worth her weight in quinoa can tell you that a calorie is not just a calorie. As much as I’d like to pretend 200 calories of frozen yogurt topped with Oreos and marshmallow cream is the same as a 200-calorie handful of almonds on the way to the gym, it simply is not. At least a rudimentary knowledge of basic nutrition is, in my opinion, necessary for making and tracking smart food decisions in the FitBit. And that, my friends, is expertise informing data.
So who’s right? Team Data or Team Experience/Intuition/Expertise?
WE ALL ARE. The bottom line is that data needs a human filter as much as humans need data-driven advice. We built our entire company on the foundation of a deep domain expertise in financial services and strategically enter additional verticals only when that same level of knowledge is achieved. The reason for that is the simple, undeniable fact that data + domain knowledge is more powerful than either on its own.
And just in case you need a study to back that claim, this one from Accenture as summarized in the Wall Street Journal should do it: “In a survey of 600 companies in the U.S. and U.K., Accenture Analytics found that data and intuition, when used in concert, correlate with higher returns on investment. Among those businesses that reported more than a 75% return on their analytics investments made over the last two years, slightly more than half said that their best decisions incorporated human expertise with rigorous data. For those companies that had a lower ROI, only 37% said they combined executive judgment with quantitative analytics.”
Anybody want to go for a walk?