As business leaders increasingly rely on data to make important decisions, they should make sure intuition continues to figure in.
BY FAISAL HOQUE
Technical transformations in every sector are reshaping the way the business world is organized—and how business decisions are made. In today’s era of big data, new data sources are revealing critical information about customers, employees, and business operations that leaders never previously had available to them. And new innovations are set to introduce an onslaught of scientifically measured information to management discussions.
These impending innovations include everything from “smartdust”—tiny Internet of Things (IoT) sensors that detect a variety of information, including noise, light, chemicals, vibration, and temperature—to RFID tags the size of pinheads that’ll be used to track products through manufacturing and distribution.
Tech innovations like these will inundate us with a new wave of information as the planet becomes increasingly connected, which means:
- Anything that can be digitized will be.
- Anything that can go wireless will.
- Anything that can get smaller will.
As a result of these changes, information will move more freely and data about the business will become more plentiful than ever before. The question is, will that mean that every business decision should be driven by data alone?
The best decision makers, in business and in life, will always be those who know how to balance data, predictive analysis, and their intuition before making a decision.
Intuition + data helps us dig deeper
Netflix founder Reed Hastings, who worked as an artificial intelligence engineer before starting the streaming company, cautions that the human element is still critical to decision-making. “We start with the data,” he told VentureBeat in 2016 . “But the final call is always gut. It’s informed intuition.”
Indeed, the greatest success comes from connecting the dots between our emotional selves and the systematic thinking that can be checked quantitatively. It’s all about how you combine data, predictive analysis, and your time-honed intuition.
Getting that balance right starts with understanding which types of real-world situations demand more—or less—subjective versus quantitative evaluation.
Today organizations may have huge amounts of data, but the challenge comes in defining which insights they would like to gain from analyzing this information. Intuition is still key in defining the specific questions to ask in order to churn out actionable insights, including:
- What markets to pursue?
- What products and services to develop?
- What business model to adopt?
- What partnerships to pursue?
Once a business leverages experienced intuition to figure out the right questions to ask, data can help answer them and go a step further to inform a variety of strategies in areas like:
- Market segmentation
- Product portability
- Customer retention
- Operations and performance management
- Resource requirements
The important thing to remember is that it should never be a case of pitting human versus machine, but instead augmenting the human instinct with just the right balance of the machine’s data.
Cross-validation is necessary
Today a massive amount of data is being collected in real time, which makes the human with machine formula more important to get right. Algorithms and systems can process information more efficiently and accurately than ever, providing greater relevance for businesses.
Where businesses previously relied on market research, customer satisfaction surveys, and sales patterns, machines can now create predictive models, patterns, and trends that incorporate plenty of what-if scenarios.
Still, our intuition must continue to remain in play. Just as we can now check our best-informed hunches against more reliable metrics, we also need to square our data-based predictive models with the wisdom of experience and intuition.
As technological innovation speeds forward, the many ways we combine our instincts with data will continue to evolve. But these quantitative and subjective realms are never likely to be mutually exclusive. Instead, organizations must challenge themselves to figure out how best to harness their combined power. The end result will be science with a human touch.
Copyright (c) 2018 by Faisal Hoque. All rights reserved.
Original article @Digirupt.io
ABOUT THE AUTHOR
Serial entrepreneur Faisal Hoque is the founder of Shadoka, which develops accelerators and technology solutions for sustainable growth. He is the author of Everything Connects: How to Transform and Lead in the Age of Creativity, Innovation, and Sustainability (McGraw-Hill) and other books.