Can gut feel exist in an analytical world?


By Werner Luksch as published in the ADMA blog.

Gut feeling may be the magic beans of our times.  It makes for good stories, it can take your company to some very cool and popular places, but, by definition, intuition-based decision-making is a leap into the unknown.

A global survey by Accenture found that when making decisions about what customers want, many organisations are just as likely to rely on personal experience as analysis of data and facts.

So, is it reasonable to make this leap?

Demanding customers, fierce competition, ever-changing business landscape and new technologies create a scenario in which timely and effective decision-making becomes a challenging task.  By relying more on personal experience and own judgment (aka gut feeling) it is possible to save time, but not to make effective decisions on a regular basis.

What is the alternative?

Acquiring information that is relevant to the business is not the problem anymore. According to IBM, 90% of all existing information was created in the last two years. That includes emails, weather data, personal health data, academic research data, news pieces, MP3 files, sales data, etc.

Once we start understanding how to use all this data – the alternatives are almost endless. Last year in England, Kleenex started using the occurrence of Google searches related to flu and NHS data to plan media where there was a live flu outbreak. The company sold an extra 430,000 boxes of tissueswith this strategy. Simple, yet powerful.

Sometimes, an insight on how to use data can end up changing a whole industry. In 2002, for example, baseball coach Billy Beane of the Oakland A’s famously turned a struggling team into a winning side by aggressively trading players based on statistics and not on the then prevailing method, “insiders’ wisdom”.

Does that mean there’s no place for gut feeling? 

Not really. Many authors argue that Steve Jobs’ aversion for customer research was key to come up with breakthrough products. Henry Ford developed an affordable car by disregarding the demand for “carriages with more horses”. There are many other examples that show the power of insight coming from a subjective perspective, especially when innovation is the objective. But I would make a case for when to use intuition.

So where’s the middle ground?

One potential path is to use gut feelings to hypothesize on what the key interactions to sell more may be. From there you’ll be able to devise ways to test the correlation among variables e.g. regressive analysis; think of partners that may be in a position to facilitate access to information (eg: partnership Kleenex & NHS); similarly, bring partners capable of influencing those variables onboard (eg: Kleenex and Google). Finally you’ll be able to make creative use of your assets to achieve results.

There are certainly many more ways to avoid pitfalls of gut feelings. Perhaps, this is the key message: use your gut feeling as part of the process, not as the process itself. And sell more.


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