As the business world’s dependence on data collection and analytics continues to grow, many strategic planners are left wondering what their role is going to be in this new era of computer-driven decision making. Is the old-school CEO going to be usurped by technology, or is there still room for someone with professional experience to make the call?
The answer is, as with so many other questions in today’s business world, “it’s complicated.” It’s a question that needs close examining, to see where and how each piece fits into the bigger picture.
The Power of Data
Regardless of your stance on the overall comparison of data to experience, there is one thing you cannot deny: data is an invaluable tool for helping modern businesses determine strategy, and any company not using data to make decisions is at a tremendous disadvantage. Being able to accurately track performance and understand the impact each of your initiatives has in the market is incredibly important.
Executives seem to be getting the message. According to PWC’s report, Gut & Gigabytes, the top three changes to big decision making in modern business have been:
- Greater use of specialized analytic tools and techniques
- Employing a dedicated data insights team to inform strategic decisions
- Relying on enhanced data analysis
One of the reasons for this shift is the wide range of applications for data analysis, of which perhaps the most popular is its ability to forecast the possible outcome of strategies in advance. Simulations and projections can provide valuable insight into the potential performance of a cross functional strategic initiative, a marketing campaign, or the popularity of a new product feature. Companies don’t necessarily have to wait until they’ve begun to execute to determine likely outcomes, and as a result, they can adjust their decision making to align with the strategy or tactic that shows the most promise.
But analysis doesn’t stop once campaigns are in flight. A/B testing has become a popular approach for experimentation and market research, in which companies compare the performance of two slightly different versions of the same initiative – such as a new web page or advertisement – and use the results to optimize campaign execution and inform future efforts. These tests help to refine strategy for product development, brand positioning, distribution channels, pricing, and more.
Where Experience Comes In
While the power of data analytics has clear benefits, it is still a tool – and one that’s only as good as the person who wields it. Deciding what data to assess, the specific result to be gleaned from the data, and how to go about the process fall under the purview of the decision maker.
Effective decision making also relies on clear communication between knowledgeable executives and data analysis teams, who must be able to convey their findings to a leadership that knows how to translate numbers into answers. Business decisions are never made in a vacuum, and being able to put the results of data analysis in context is how a proper strategy is developed.
It’s also important to remember that experience with analytics falls under the realm of ‘experience.’ Do you know if a 2% improvement in click-through-rate is really that much of a difference? Does this metric or that metric truly give a good sense of the decision factor it’s meant to represent? Knowing which results to trust, and which KPIs tell the true story, can make or break your business strategy.
While data analysis is essential, the experience and intuition of business leaders are what’s needed to apply that information to strategies that serve the larger organizational goals. This ability takes on an even greater importance when the data is split, with multiple paths forward or no clear correlations at all. Even in today’s analytic-driven world, there will always be times of doubt, when executives have to make decisions without a clear answer in front of them.
Bringing the Two Together
It’s clear that data analysis should be a major cornerstone of today’s business strategy, and experience-based decision making is also still a crucial part of the puzzle. In the end, it’s not really a matter of data vs. experience, it’s more about how you can combine the two to make the best decisions for your product or your company.
Quite often, merging the two together is where the problem lies. According to the Gut & Gigabytes report, “over half of C-suite respondents admit to discounting data analysis that they do not understand, while one in four lack the expertise to make greater use of it.”
Some executives might not like relying on data, some might be bad at using it, and others might not even think to turn to it at all. If you’re a strategic planner that falls under one of these categories, our advice is to fix that as soon as possible. If there is any certainty in this discussion, it’s that the ability to merge data and experience together makes companies more successful than those who lean on only one. Trust us on this one – we double checked the data.
Interested in learning how to better use your experience in decision making? Grow your skills in strategy formulation, implementation and evaluation with our live instructed online course. Click here to register today!