Is Your Decision Making Based On Data Or Gut Feel?

When you are confronted with a threat or an opportunity you would do well to acknowledge your gut feeling when it comes to decision making. Whist you and I may not understand how that works it has probably been one of the key things that has allowed humans to survive and evolve.

We live in a time of science and information. As incredible as that is, your gut feeling adds another layer of valuable inputs. I am totally onboard with the power of data. However, I also realise there are always many ways it can be interpreted, resulting in many outcomes. It is sometimes our gut feeling that encourages us to look at the data in a particular way to consider what we can’t see.

In this day and age you must be striving to access the best data available and dedicate the resource to analyse and use it. The point I am making is that your gut feeling is still highly valuable as an extra input.

I was the National Catering Manager for a large global catering company and the CEO tasked me to do an urgent fast turn-around assignment. He was presenting to the board at the end of the following week and needed to present some cost saving solutions. He was proposing to consolidate our out catering and our contract manufacturing operations into one facility. This was so we could stay on track with the year end result and reduce next year’s forecast overhead costs.

My brief was very narrow and prescriptive, which moved a piece of business from someone else’s portfolio into mine. This thereby increasing my topline sales, reduce their overhead costs and a piece of less profitable business.

On the surface it looked very logical and a bit of a gift. So I produced the report as requested with four days to spare. But I felt really uneasy for the next couple days and knew there was something more to it that I wasn’t seeing.

I woke up in the middle of the night on the Wednesday knowing I needed to revisit it. I worked on it the following day and late in the afternoon sent through a new report showing it was a terribly short-sighted idea. The second report showed that this amalgamation was doable but would consume about 88% of our capacity. I was working on two large profitable opportunities likely to come into fruition within the next 18 months. If successful with either of them, we would be limited by space and kitchen capacity. Summarised as an immediate gain but with a significant short and medium-term consequences and opportunity cost.

It wasn’t a report that won me any brownie points with my manager, but it did allow us to go on and double the contract manufacturing business.

Information Overload In Decision Making

In both your business and in your life, you have more information available than any other time in history. It can be very overwhelming for some people. Here, I’ve put together five suggestions on how to make your data work better for you:

• Decide what the key matrix are (KPI’s) and focus on them
• Try to limit your key KPI’s to less than five
• Use reports or other measurements to drill down for deeper understanding only
• Make a dashboard and turn the data into a visual – it is so much easier to use
• Focus on improving trends – measurement allows for experimental management

Data capture systems in your business; accounting software, point of sale, rostering and staff management software, all hold data for you to spot check reports when you need to drill down further. Less KPI’s can be better.

What Are Gut Feelings?

They are anchored in your experiences and intuition which means they are personal and can access your emotions register. This can make them hard to communicate as a solid rational reason or for a particular course of action. They can also be highjacked by your subconscious bias, a dynamic changing world, laziness and what you might get the most pleasure and least pain from.

Unfortunately, these downsides allow the concept of emotional data to be discredited so you have to be on guard.

Life is supposed to be enjoyable and fun so embrace making decisions with both data and feelings. See it as an opportunity.

Reflect on how lucky you are to be living with freedom and the chance to experiment, grow and sometimes be wrong. It is the very same path to being right and successful.

Mark Collins is a hospitality food and business coach. Find out more at markcollins.co.nz