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Wednesday, October 23, 2019

CEO Insider

When It Comes to Leading Your Business, Should You Lean on Data or Instinct?

For every business that is buoyed by the power of big data, countless others are drowning in it. According to Forrester, about 60% to 73% of enterprise data goes unused. It’s no wonder that Debra Bass, president of global marketing services for Johnson & Johnson, argues that many marketers should be diagnosed with “InfoObesity.” Instead of feeling empowered by data, companies struggle with a nonstop flood of information.

Why? Many businesses collect data for its own sake. As big data has grown even bigger, many of the systems built to process it into useful insights have fallen behind. Instead of creating clarity, serious obstacles prevent us from turning this wealth of data into analytical decisions.

Excess data also unintentionally stifles an important resource: gut instinct. Instinct helped businesses rise to the top long before the Internet of Things was a reality. Data might convey valuable insights, but you need a healthy dose of intuition to process and act on that information successfully. There’s a reason that Spock isn’t Captain of the USS Enterprise.

If you’re blindly collecting data and struggling to tap into your intuition, go on a data diet with these three steps:

  1. Figure out why you’re collecting data.
    Collecting data without a clear purpose is a common mistake. Without factoring your instincts into the process, pointless data only contributes to “InfoObesity.” To avoid that problem, collect data with the specific intention of informing your business strategy and specific decisions.
    For example, if you want to decide which new global market to enter or make plans for how you might win over a new market, focus your data mining on supporting such decisions. By blindly collecting every piece of data possible, you’re missing the point. Collect data with purpose, and you’ll generate meaningful business benefits.
  2. Relationships rule the day.
    With so many companies embracing automation, you’d be forgiven for thinking that human interaction is no longer a priority. That said, automation liberates humans to do what we do best: meet people, cultivate relationships, and make smart decisions that create value.
    AI-powered accounting software isn’t likely to have a groundbreaking impact on your organization. An accountant who uses her intuition and the information she gathered from that software before meeting with your private equity partners to explore additional investment opportunities very well could, though.
  3. Use data to build brilliant teams.
    Creating value in your organization starts with the people you hire. Dig into your data to learn about potential candidates, but don’t ignore your instincts. Use visualization tools to quickly organize data and scorecards on top candidates so that you can more deeply evaluate higher-risk elements, such as emotional intelligence or executive team dynamics. Highly successful companies aren’t lucky — they have more talented team members who produce better outcomes.

Too many C-suite executives and business leaders see data as a great equalizer, but they neglect the power of their instincts. Instead of assuming data will cure what ails you, it’s time to start seeing data for what it is — another useful tool in your arsenal. By combining data with your intuition, you can stop collecting data for its own sake and build a company that actually “competes on analytics.”


Written by Rick DeRose.

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Rick DeRose
Rick DeRose, managing partner and co-founder of Acertitude, advises global business leaders of private equity, technology, and professional services firms on recruiting board, CEO, and C-suite talent to transform their businesses. Rick is an opinion columnist for the CEOWORLD magazine.
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