How Much Sway Should Data Have in CEO Decision-Making?

Does a CEO’s gut instinct matter in a world that runs on digital data-crunching?

Over the last decade, big data analytics has risen to the forefront as a tool to facilitate smarter, faster, and more effective decision-making in business. Its meteoric ascension into corporate boardrooms and executive offices has displaced our conventional ideas about the value of an individual leader’s savvy. Today, a leader who so much as mentions intuition during a strategy meeting is likely to prompt a few skeptical looks and a polite variation of: “Okay, but what does the data say?”

But is our appreciation of big data at the expense of intuition poisoning our decisions with blind faith?

As leaders, we need to ensure that we aren’t allowing ourselves to be steamrolled by raw data. The truth is, data applied blindly or without context is worse than useless — it can be outright misleading.

We seem to have forgotten in the hype that data is meant to inform our human intuition, not overpower it.

In recent years, many executives have realized that the most significant barrier they face in creating data-driven organizations isn’t the technology, but the people who should be using it. One recent study published in Sustainability found that nearly half (48.5 percent) of U.S. executives polled in 2018 cited “people challenges” as their foremost concern in creating a data culture.

The problem appears to be a lack of personnel training and support.

“Managers need to wake up to the fact that their data investments are providing limited returns because their organization is underinvested in understanding the information,” business researchers Shvetank Shah, Andrew Horne, and Jaime Capellá wrote in an article for the Harvard Business Review. “Companies that want to make better use of the data they gather should focus on two things: training workers to increase their data literacy and more efficiently incorporate information into decision making, and giving those workers the right tools.”

Bennat Berger is Co-Founder of Novel Property Ventures and founder of Novel Private Equity. To read more about him, visit: www.BennatBerger.com