Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Executives Rely on Experience And Advice, Over Data

Executives Rely on Experience And Advice, Over Data

Business leaders around the world – 94% – say management of their company is prepared to make significant decisions about the strategic direction of their business, but barely one-third relied primarily on data and analytics when they made their last big decision.

According to Gut & gigabytes: Capitalising on the art & science in decision making, a new survey report by the Economist Intelligence Unit sponsored by PwC, highly data-driven companies are three times more likely to report significant improvement in making big decisions, but only one in three executives say their organisation is highly data-driven.

Executives’ intuition or experience and the advice and experience of others in their organisation were the decision making modes of choice for 58% of executives. However, the 43% of executives that say their companies are highly data-driven report the biggest improvements in decision making over the last two years. All executives said top priority over the next two years is to make investments in the quality of data analysis to make better decisions.

More big decisions are made opportunistically than deliberately, and big decisions have big impact on future profitability; nearly 1 in 3 executives value those decisions at $1 billion+.

Executives make big decisions frequently and review them often, over three quarters of executives make a big decision each quarter and 43% review them every month. Many executives are sceptical or frustrated by the practical application of data and analytics for big decisions.

The survey found that the five most important decisions facing executives in the next 12 months are, in order: growing the existing business, collaborating with competitors, shrinking the existing business, entering a new industry or starting a new business, and corporate financing.

PwC Partner Colum Rice says, “How good a company is at making big decisions will determine their success and while we’re seeing executives continuing to rely on experience, advice, or their gut instinct, they can also see that investment in data and analytics is crucial for a business’ success. Their experience and intuition and using data and analytics should not be mutually exclusive.

“Executives will need to respond to the challenge as to how best to marry the two. They know the right questions to be asking – they now need to get the right answers using data from the last two years to inform their decisions.”

Executives said the appearance of a business opportunity they could not ignore was the most common motivation for considering a big decision (30%). Other reasons: making decisions that were previously delayed (25%), strategic fit (18%), testing ideas (15%), reacting to external factors (9%), and regulation (4%).

Despite executives’ comfort in relying on gut instinct, nearly two-thirds (63%) said the use of data has changed how their company makes decisions and they expect it to have more impact in the future. The top three changes executives plan in decision making include the number of people involved in making a decision, greater use of specialised and enhanced analytics and data analysis, and the use of dedicated data teams to inform strategic decisions.

“With the impact of big decisions on profitability, often valued in the billions of dollars, and the lack of predictability of when decisions need to be made and when, companies are trying to increase the speed and sophistication of their decision making. This requires using newly accessible data and analytic techniques, and clarifying accountability in the decision making process, ” concludes Mr Rice.

The survey findings affirm a balanced approach to using data and analytics to make speedy and sophisticated big decisions for competitive advantage:

• € € € €Mapping decisions to shareholder value by pinpointing decisions that have the biggest impact on the company’s future
• € € € €Linking the strategic alternatives to business impacts by simulating how mega trends, industry trends and the strategic alternatives affect the business and operating model
• € € € €Applying a value and results lens by quantifying the expected improvement in metrics associated with improving decision making
• € € € €Adopting a structured test and learn approach by specifying changes to the organisation, process, technology and culture that are needed to improve decision making


ENDS


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Mycoplasma Bovis: More Properties Positive

One of the latest infected properties is in the Hastings district, the other three are within a farming enterprise in Winton. The suspect property is near Ashburton. More>>

ALSO:

Manawatū Gorge Alternative: More Work Needed To Choose Route

“We are currently working closely and in partnership with local councils and other stakeholders to make the right long-term decision. It’s vital we have strong support on the new route as it will represent a very significant long-term investment and it will need to serve the region and the country for decades to come.” More>>

ALSO:

RBNZ: Super Fund Chief To Be New Reserve Bank Governor

Adrian Orr has been appointed as Reserve Bank Governor effective from 27 March 2018, Finance Minister Grant Robertson says. More>>

ALSO:

ScoopPro: Helping PR Professionals Get More Out Of Scoop

Scoop.co.nz has been a fixture of New Zealand’s news and Public Relations infrastructure for over 18 years. However, without the financial assistance of those using Scoop in a professional context in key sectors such as Public Relations and media, Scoop will not be able to continue this service... More>>

Insurance: 2017 Worst Year On Record For Weather-Related Losses

The Insurance Council of New Zealand (ICNZ) announced today that 2017 has been the most expensive year on record for weather-related losses, with a total insured-losses value of more than $242 million. More>>

ALSO: