‘Gut feeling’ drives business decisions

8 February 2010

8 February 2010 | Helen Gilbert

Senior managers rely on gut instinct rather than data-driven analysis when making key business decisions, according to research.

A survey of 600 managers at more than 500 blue-chip companies in the US, UK and Ireland found that weak analytical capabilities – including isolated data, outdated technology and a lack of analytical talent – were preventing firms from gaining valuable insight that could lead to better business results.

Forty-three per cent said their organisations had failed to employ professionals dedicated to analytics. More than half said their companies were structured in a way that prevents data and analytical talent being used effectively, the report by consultancy Accenture found.

The study also showed only 5 per cent of manufacturers used analytics to support supply chain and resource planning.

Senior managers were in fact relying heavily on “gut feel” and “soft” factors including consultation with others, intuition and experience, the report said. Meanwhile, some organisations were making decisions based on flawed data.

Dave Rich, managing director of the Accenture Analytics Group, said: “Organisations that fail to tackle the issues around data, technology and analytics talent will lose out to the high-performing 10 per cent who have.”

The research suggested little had changed since 2008, when an  Accenture survey found 40 per cent of business decisions were based on judgment rather than analytics.

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