Dr. Elliot King

In 2007, Malcolm Gladwell, perhaps the best-selling author on the planet today, now that J.K. Rowling is taking a breather, published the intriguing book Blink. The beguiling thesis of the book was that snap judgments made by the right person can be good - very, very good actually. Many people walked away from the book with perhaps the oversimplified or even wrong message that they should just go with their gut since it is usually as good as other methods of decision-making.

Well, don’t believe it. A study conducted by the IBM Institute for Business Value in conjunction with the MIT Sloan Management Review found through a recent study that top performing companies use analytics five times as much as lower performing companies. The data gathered by the survey is pretty impressive - more than 3000 executives, managers, and analysts in more than 30 industries in 100 countries were polled. In virtually every management category ranging from financial management and budgeting to workforce planning and management, the best companies used analytics more often than those that trailed them.

Perhaps the most interesting result, however, is the identification of those management areas in which less competitive companies begin to rely more heavily on intuition and seat-of-the-pants decision-making than on data-driven analysis. For example, for financial management and budgeting, almost all the companies in the survey relied on analytics. The top companies were just more diligent in their application.

But in management categories like brand management and workforce planning, the worst performing companies tend to veer away from applying analytics to their decision-making process. The biggest gaps came in customer service, product research and development and general management. While analytics did not play as central a role in those areas even for the best companies as it plays in budgeting, the companies at the bottom relied much more heavily on intuition.

The survey demonstrated two important points. First, as hard as it may be to measure the exact impact of analytics on any specific task, the impact on overall company operation is clear. Secondly, putting the systems in place to support data-driven decision-making is not easy. So with all due respects to Malcolm Gladwell, the message of this study is “Don’t Blink. Think.” How important do you think analytics are to your decision-making? Do you really know how it relates to business intelligence within your organization?

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