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Balancing Analytics and Intuition

Posted on  27 September 10  by 

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Tom Davenport, President’s Chair in Information Technology and Management at Babson College, recently wrote about the importance of “ambidextrous judgment,” using both data analytics and business intuition to push your organization forward.  Davenport uses examples from Harrah’s, Netflix, and others to demonstrate companies’ increased focus on working to combine data with business intuition in their decision-making process.   It appears as though traditional “data miners” are looking to build subjective creativity and intuitive courage, while “gut feel” executives are realizing that near- and real-time data can provide valuable prediction tools.

MREB view: We could not agree more that combining traditional data analysis with intuition leads to better business decisions.  In fact, a few years ago we conducted a survey to identify the drivers of insight productivity, and working in an environment that rewards risk-taking and encourages intuitive creativity was one of the four main factors evident in more insightful researchers.  (MREB members, read more about this and the other 3 drivers of insight productivity here.)

The issue our departments face, of course, is how to establish a principled risk-taking environment for researchers—folks who by their very nature have an aversion to risk and who’s very job responsibility is to provide the information and analysis that support business decisions.  This personality conundrum underlines two significant findings from our survey:

  1. Team leaders need to provide positive encouragement for researchers to engage in creative (and potentially risky) intuition-based activities.  As the providers and keeper of insights, Researchers have more knowledge than most upon which they could base intuition-based recommendations—encourage them to do so!  MREB members, see how Diageo actually redefined its role expectations to ensure that they make judgment-based, not just statistically significant data-based, recommendations.
  2. Once team leadership instills its expectations for principled risk-taking, you need to build in team support for focusing on originality rather than certainty.  Your team’s environment and process must reinforce the goal of consistently developing creative ideas.  MREB members, access Corning’s research process, which forces researchers to articulate hypotheses before their research has yielded certain answers.

As for the second part of “ambidextrous judgment,” we’re working right now on a whitepaper about the relationship between market research and data analytics.  Are folks in-sourcing analytics responsibilities?  And how then are you organizing and integrating these capabilities with your existing research department?  We’ll keep you posted on our findings, and we’d love to hear from you if you have a perspective to share!  Comment below.

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