Europe’s CEOs prioritize ‘gut-feel’ over data-led decisions
Organizations are supposedly more data-driven than ever before— they’re certainly more data-laden.
Across all industries, businesses now generate millions of gigabytes of data each day, all of which can be combed through and analyzed in order to unearth market and competitor trends as they change by the day.
Ultimately, data can empower stakeholders with the intelligence to crucial business decisions, in the confidence that they can be validated by statistical facts and trends, whether that is historical information or data being delivered in ‘real-time’.
Businesses are aware of a growing need to utilize the data they’re amassing in such a way, particularly when as much as three-quarters of it is left in the dark.
The pressure to respond is evident in an “unprecedented” demand for data management specialists— such as scientists and analysts— while the Chief Data Officer is becoming a more common presence in the boardroom, tasked with driving a wider, unified ‘data culture’ across all facets of the enterprise.
While the data and the awareness and tools to use it are certainly there, the pressure to make ‘business-critical decisions’ quickly is hampering C-levels’ ability to work from the hard numbers at their fingertips, finds a report by Splunk in collaboration with Censuswide.
In Europe, more than half of c-level executives (53 percent) report being pressured to make critical decisions about once a day. But the lightning pace of decision-making required is causing a diversion away from data-led decision making at a time when it’s most vital.
Forty percent of c-level and business decision-maker (BDM) respondents reported that the need to move quickly is holding them back from asking their growing data teams for the information from which to base or validate their decisions.
Instead, nearly half (47 percent) of business-critical decisions are made by ‘gut feel’— less than one percent of business leaders claimed their decisions were “always” data-led.
In the heat of the moment, senior executives will rely on their own business experience first, while referring to recommendations from colleagues (52 percent), customer feedback (51 percent) and repeating what worked in the past (43 percent) were other common bases for backing crucial decisions.
Reference to business and market data is sidelined in the heat of the moment, Spunk found, and is often demoted for use in a “rear-view mirror diagnoses”— an approach that can lead to missing opportunities for growth as they are unfolding.
Leaders understand that their organizations are investing resources to better harness the explosion of data they face, but this is not yet being used to bring data to every question, action, and decision they need to make.
“The fact that businesses are producing vast amounts of data is indisputable, but it’s clear from this research that our senior business leaders, including those at board level, are still struggling to access the data on their own terms, when they really need it to power live, forward-looking decisions,” said James Hodge, Chief Technical Advisor at Splunk.
“As an industry, we need to do more to support businesses apply their own data to everything they do, and turn it from business diagnosis or remedy, into business development.”
Nearly all respondents (92 percent) could name a specific business area that they believe more accurate data could help to improve, with a third (33 percent) citing ‘customer growth’ as the biggest business opportunity that data could unlock for their business.
Similarly, budget is no barrier, with less than 1 in 10 (8 percent) of the C-suite surveyed citing monetary investment as a barrier to investing in more or better data sources and software.
Organizations, then, must evaluate their process of communicating the value of data— how they can streamline it in a way that makes it actionable at a pace that doesn’t compromise the impact of making swift decisions on-the-fly.
As data continues to gather, businesses will find it increasingly challenging to capitalize on insights effectively, in real-time. C-levels must work alongside their data management teams, and all departments, to ensure the data they need is accessible and explainable for stakeholders across the organization, anywhere.
20 January 2021