Human Factors Are Deciding Factors, Not Big Data
- by Steve McClellan @mp_mcclellan, July 15, 2014
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.
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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.”
Quite right, Steve. It isn't only about numbers, as some of us have been pointing out for a long time. Two other factors are corporate "inertia"----it's very hard to sell in a new way of doing things----and lack of readability-----how do you know if the new methods are working? The former is an obvious one as few upward-mobile execs are willing to gamble their careers on new ideas; the latter----readability-----is part of this equation. Marketing directors, and still bigger shots, at most advertisers think that they have a handle on how to use their favorite medium---TV---- and a wealth of historical research that tells them----or so they think---- how they well they are doing. It takes a long time to develop similar degrees of confidence for "new" media or new ways to approach media buying, targeting, etc.---especially when corporate dollars, not ongoing annual brand budgets, are not allocated to study the new options and performance metrics. In my opinion, this is where many of the larger advertisers have fallen down. They passed the buck to their branding agencies rather than investing the funding---and staffing---to get the job done in ways that are most relevant to their businesses.
1. Not everyone. 2. Big Data can influence choices called human choices and that is the job behind the big data controllers.