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Your Gut vs. Data – Analytics Culture

Posted by Patrick Patterson in Culture on June 20, 2010

It seems every company I talk to lately has a story about their analytics culture. Analytics “Culture”, from the Latin cultura stemming from colere, meaning “to cultivate”, is defined here by how businesses use analytics to make smart business decisions.

First, answer this question: How does your organization make most of their important and smart business decisions?

By gut feel and intuition
Using analytics
Primary gut feel while using analytics
Primary analytics while using intuition and gut
None of the above (we don’t make smart business decisions)

A recent online poll tallies voters with these results:

41% of voters feel their company is using primarily gut feel while looking at analytics
29% are looking at analytics first while sometimes relying on their gut
20% always use analytics
8% always use gut feel (never looking at data!)
2% don’t know (why fill out the poll if you don’t know? seriously.)

Looking at the results here, I would say that 30% of people are in trouble (using nothing but analytics, using nothing but gut, or don’t know) and 41% need to switch the way they do business. “Using nothing but analytics is bad?” I’ll get into that in a moment…

Now, anyone who has read the book Blink by Malcom Gladwell would argue that you can give me all the analytics you want about certain topics, but the things that separate good ideas from great ideas are intangible. You would then say that the analysts of the world are trying to push analytics into places where they don’t belong. For major, ground breaking, and business altering decisions – analytics is only of modest usefulness. I have heard this from more than one CEO or top decision maker in a company, “my gut has never been wrong.”

My response to that? “Hogwash.” Ok ok ok, maybe I didn’t actually say “Hogwash” but that’s what I was thinking. The truth of the matter is that once we dug into these “gut” decisions, they were actually using months – if not years – of analytical data to make those important decisions that shaped their careers. In Blink, Gladwell is saying that intuition is useful only in the context of a great deal of experience and expertise (essentially a lifetime of A/B tests). And that in the absence of these things- intuition is dangerous.

The beauty of Web Analytics is that you don’t need (and sometimes don’t even have) a lifetime of experience to help you make that next great decision – the data is available, SO USE IT. Throughout this blog, I will touch on how to create a culture of analytics and optimization and it starts with understanding that it is not about promoting a culture that makes blind decisions (using only data or gut), but a culture that makes decisions BASED on the data that is in front of them and then uses that decision to make the next decision better.

Upcoming posts will include: