In the age of Big Data, it is often assumed that the rational and analytical are the primary drivers of business decision making. But a new study from The Fortune Knowledge Group and ad shop gyro, has found that often isn’t the case.
While a majority of senior business executives believe that data is an important tool when making business decisions, it is subjective factors, such as company culture, values and reputation, that play the pivotal role, per the study, which polled 720 senior business executives (88% of which had director-level titles or higher) in May and June.
Among the key findings: Human factors are the deciding factors. Nearly two-thirds (65%) of those surveyed said subjective factors that can’t be quantified, such as company culture and corporate values, increasingly make a difference when evaluating competing proposals. Only 16% disagreed.
Also, executives tend to “trust their gut,” with 62% indicating that it is often necessary to rely on gut feelings and soft factors when making decisions.
The study also found that strong reputations and culture highly influence decision making. When choosing a company to do business with, 70% of respondents cite reputation as the most influential factor. Company culture was also a top driver according to 53% of executives surveyed.
“Business decisions are made emotionally and justified rationally,” said Christoph Becker, CEO and CCO, gyro. “A side effect of the tsunami of digital content is, too often, there is an utter lack of human relevance. That is why if you truly want to connect with business decision makers, you must make them feel. That is why you must focus on the ‘why’ of your business, the pure idea."
The study, called “Only Human: The Emotional Logic of Business Decisions” also found that 61% of executives agree that when making decisions, human insights must precede hard analytics. Positive gains outweigh negative risksm with 68% agreeing that the ambition, admiration and potential rewards outweigh fear of failure and being blamed for making a bad call.
“Business decision makers are, of course, using data to their benefit,” said Jed Hartman, Group Publisher Worldwide of Time, Fortune and Money, who oversees the Fortune Knowledge Group. “However, when looking to select a business partner, it is clear that emotion plays a vital role. Decision makers do not just want a partner who looks good on paper. They want to create a relationship that can lead to a successful, long-term partnership.”