Blog | Moving From Hunches To Data-Driven Decision Making

Published November 04, 2015 by Luke Talbot

Employee Insight
Moving From Hunches To Data-Driven Decision Making

Senior managers often have to make tough decisions that can make or break a company. In the past, many have relied on gut instinct and backing a hunch – with mixed results. For every Steve Jobs ignoring research reports, launching the iPad, and creating the tablet market, there are less successful examples.

Examples include hen-CEO of Motorola, Gregory Brown, who decided in 1998 to pour money into the Iridium satellite phone project, instead of mobile phones. The failed project ultimately cost the company $8 billion.

In many cases the reasons for following hunches is simply due to problems with the available data – it either isn’t comprehensive, isn’t real-time or in a form that is difficult to understand. It could even be that there’s too much of it, and managers can’t see the wood for the trees. In these cases it isn’t a surprise that many business leaders back their gut feel. Yet it doesn’t have to be this way.

Empowering employees to empower management

Multiple factors are making data-decision making easier. Firstly, there is more information available, from more sources than ever before. Much of this comes from employees, who are on the frontline of the company, talking to customers and carrying out their duties every day. They are effectively the ones that can supply management with the feedback data to make better decisions. This could be feedback on their own job, how they feel about the company, its operations, culture and management. Equally they can provide input on what customers are saying and doing when they interact with a business. It’s this anecdotal information which can be the most valuable – what makes customers smile and what they say about competing products or services. How this information is collected is also changing – as well as traditional surveys, many companies are implementing communities and panels with both customers and employees. This helps deliver greater engagement and also provides much more qualitative information that can be used to back up decision making.

As the providers of these two sources of key insight, feedback from employees can be used to improve processes, products and operations. There are additional benefits. When employees become deeply engaged, they typically dream up innovative ideas, based on their experiences – they just need someone to listen to their feedback.

Secondly, technology has improved to make the collection, collation, analysis and presentation of this data much simpler and faster. Today’s advanced enterprise feedback platforms mean that the days of waiting for paper-based monthly reports or relying solely on employee feedback from an annual survey are over.

Breaking down barriers to data-driven decision making

To get the most from listening to your employees and acting on it requires a company to follow three key rules:

Data has to be complete, with all feedback brought into a single system. Silos between systems inhibit data-driven decision making since it means it’s impossible for information to be collated and shared based on inputs from employees, customers and potential buyers. To make comprehensive decisions you need comprehensive data. Otherwise you are making decisions based on just part of the puzzle.

Data has to be simple to understand. Having comprehensive data is not enough – it has to be presented in a way that is simple to understand, and links directly to business metrics. It also has to be active, not static, enabling business managers to interrogate it easily, ask questions and get meaningful answers. Dashboard style reporting where managers see information in a clear and appealing way and can ask "what if?” questions is therefore vital. It has to be easy to use by managers themselves, rather than having to ask business analysts to set up reports, which adds an unnecessary time lag to decision making.

Data is up to date. The days of weekly or monthly PDF reports being used to drive decision making are long gone. In the real-time economy managers need to make fast decisions, but these have to be based on the latest information, and update in real-time where possible. Therefore, it’s important to be collecting fresh data regularly. Traditionally, many companies only gained insight into employee concerns and feedback through an annual survey or yearly review. While this can deliver valuable data, it is simply not enough in today’s real-time world. Supplement the annual process with more regular research, such as through communities or pulse surveys so that you can see what employees are thinking and saying far faster. It is even possible to poll staff, such as in shops or contact centres, for their feedback at the end of every ship to give instant responses on particular subjects.

Getting to data - informed gut decisions

No one is saying that ‘gut feel’ business decision making should be removed completely, indeed many successful people thrive on instinct. But in today’s world there is simply too much at stake to discount sound, factual information, especially with the ability of technology to help make the collection, analysis and display of data much faster and simpler. Finnish games developer Rovio (best known for the Angry Birds games) are one of the best examples of the new approach. They use an enterprise feedback platform to have an ongoing dialogue with their fans (they have "fans” not "customers”), to decide what products to develop and markets to enter. The result? It has successfully diversified into many new areas, including launching into the soft drinks sector, where it has grown to be number one in its home market. Therefore companies need to encourage managers to take the insights that feedback provides into account before turning to their gut feelings. Decisions can then use the best of both systems, reducing risk and driving greater success.

This blog was first posted on HR Zone on 2nd November, 2015


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