How Big Data Has Shifted Corporate Decision-Making?
Why did businesses succeed in the past? A few factors: timing, intuition, know-how, and a little bit of luck. While a lot of these factors still influence corporate success and decision-making today, there are more tools available than ever that are available to help predict success or failure. One of these tools is big data—which offers solid insights that are often as valuable as even the most experienced CEO’s intuition. Today, big data has shifted corporate decision-making in many companies, particularly startups. Does intuition still have a place in our data-driven world? Let’s take a look.
Mining the Past for Future Growth
While intuition is based on past experience (the past experience of a business professional), big data represents a concrete picture of the past. Mining past data of an organization (or the organization’s competition if the company is brand new) is key to predicting the future of new initiatives. While trends can change, it tends to be more reliable to make decisions based on the past to help spur future growth.
Changes in Business Strategy
Big data has become a popular tool in business strategy partially because it’s easy to see and communicate the reasons behind decision-making. When decision-making is based on intuition alone, investors may have a harder time getting behind the strategy or new initiative. “I just have a feeling” is less compelling to people who have money on the line than “data indicates our customers prefer to shop from a mobile device than a desktop. Even though they may put a lot of trust and faith into the intuition of those developing the business strategy, nothing beats prediction based on past behavior. Big data is growing in popularity in executive offices around the world for this reason—44% feel data is an important factor in shaping strategy.
Intuition Enhancing Data-Driven Strategy
While it’s easy to argue that the cold, hard numbers are the only ingredient needed for a successful business strategy, indications are that intuition is enhanced by big data, not replaced by it. In fact, the data itself indicates that a strong intuition and extensive experience are key to getting the most out of big data initiatives. One study showed that companies who saw more than 75% ROI (return on investment) on their big data initiatives often combined intuition and data in their decision-making—more than half of the companies surveyed. In contrast, fewer companies with a lower ROI were using this approach—only 37%. Executives and data scientists need to know what questions to ask and what to look for in order to leverage data to its fullest potential. Intuition may not always be right, but strategy based on big data isn’t 100% successful either. It’s the combination of the two that can lead to impressive ROI and business growth.
Testing Assumptions and Intuition with Big Data
Intuition may help business professionals ask the right questions and gain helpful insights from data, but where data really shines is in the proof. Testing assumptions made through intuition is a crucial role for big data in shaping business decisions. Intuition becomes a hypothesis—a hypothesis that can be proven or disproven with company data, reducing intuition errors.
The Future of Strategy and Decision-Making
Now that we have access to a staggering amount of historical business data, this tool isn’t likely to go away. Many companies have seen impressive growth by leveraging big data properly, and more companies are sure to start taking advantage of data as time goes on. However, as the best leaders know, there’s more to strategy and leadership than hard data—you need to incorporate the human touch for impressive growth.