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Why Data Needs Intuition to Tell the Whole Truth


data-and-intuition

Data doesn’t lie.  That’s the mantra we hear so often from advocates of big data, analytics and those who rely solely on the numbers.  In the age of analytic-based arranged marriages, Fitbits, and Apple watches, we have grown accustomed to data-driven decisions being synonymous with the truth.  And guess what?  We make life-changing decisions based on this data.  Business leaders map out the future of their own companies based on this data.  So, where does the truth reside?  Can we trust the data or not?

The answer is yes and no. Data without human intuition can be misleading, yet human intuition without any data can lead us astray. Data helps us to identify trends—trends that can make us aware of pitfalls or find that elusive unicorn in Silicon Valley. So, it takes both.

Let’s take a closer look at why data and human intuition are a powerful combination.

 

Blockbuster: When a Data-Only Focus Leads to Decline

Remember barreling down the street in the ‘90s, trying to reach Blockbuster before midnight to avoid those pesky late fees? Blockbuster’s business model—which included an unhealthy amount of business revenue from late fees—was backed by data. In 2000, this same data advised Blockbuster to pass on a $50M deal to purchase Netflix—a missed opportunity that would spell doom for the video rental company.

 

data-and-intuition-blog-netflix

 

Today, Netflix’s market capitalization is valued at over $136B and it has 5,400 employees with no—I repeat, no—brick-and-mortar stores.  Sure, the data didn’t lie in this case, but it missed something critical: human intuition and foresight.  Moral of the story? More often than one might think, we are led astray by blindly trusting the data and ignoring our human intuition and insight.

Data without insight on how to use it wisely makes for a Blackjack table of decisions.  You may be using some skill, but mostly you’re probably just guessing.  Pure data-driven decisions give us the illusion that we have done our due diligence.  But your intuition—that nagging feeling in your gut about what to do with the data—is just as important as the data itself.  Take it from Jeff Bezos, founder of Amazon, and his philosophy on decision-making: “All of my best decisions in business and in life have been made with heart, intuition, guts… not analysis.  If you can make a decision with analysis, you should do so. But it turns out in life that your most important decisions are always made with instinct and intuition, taste, heart.”

 

Chick-fil-A: Proof that Data Doesn’t Replace Intuition

In 2016, Chick-fil-A was named the highest-ranking fast food restaurant in the country for customer satisfaction, according to the American Customer Satisfaction Index Restaurant Report.  Yet, Chick-fil-A has standard practices that don’t jive with the data but have served them well.  Chick-fil-A’s data suggests, by doing simple math, that the company’s profit would increase by 14% if Chick-fil-A were open seven days a week—but we all know it’s closed on Sundays.

This profit could mean a lot to their bottom line; but early in the company’s history, Truett Cathy decided that his employees needed time to refresh, relax and enjoy their families without concern for work. As a result, Chick-fil-A is closed every Sunday for just that reason, and the employees are better for it. This unconventional wisdom and intuition have earned the company a reputation for having some of the best customer service and highest employee satisfaction of all industries—not to mention their chicken sandwich is in a league of its own.

 

data-and-intuition-blog-chick-fil-a

 

When eyeing data as the be-all and end-all for decision-making, consider this: if you can’t measure it, maybe you shouldn’t do it—but how many critical decisions involve things we have yet to learn how to effectively and consistently measure?  How can we measure how a product makes a customer feel?  Or whether or not your empathy with your user base is empathic enough?  What about brand loyalty?   Don’t misunderstand, data is important—vital even. But data needs help from our intuition to tell the whole truth.

Looking for more ways to make better business decisions with your data? Visit our blog to get even more advice and insights on all things data.

 

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