Data Analytics vs Intuition for Decision Making

With the increasing availability of data and analytical capabilities, the question of decision making by data analytics vs intuition is often being debated. Our education and work environments are increasingly relying on analysis and even many traditional fields based on intuitions, such as sports, are increasingly relying on analytics for making business decisions with great successes. Even with the recognition that human judgments are limited by available information, and cognitive limitations, there are many scenarios decisions are still better to be made by judgement and intuition in this increasingly data-driven and data-insight world.

The Decision itself need to be framed in the right way

Before you make any decision, you need to make sure it is truly the decision you need to make. Regardless of how much data is available and how powerful the analytical tools are, I will venture to say that human is better than machine in framing the question and define the problem. How you define the problem and frame the question will determine how you solve the problem. 

Transformative decision needs intuition

When major transformational changes or strategic decisions need to be made for any organizations, especially during time of changes or uncertainties, the organization would need leadership to create a vision based on judgement. Supporting with data is important but change would not occur without the vision. President John F. Kennedy did not have the data when he announced before a special joint session of Congress on May 25, 1961 the dramatic and ambitious decision of sending an American safely to the Moon before the end of the decade. Deng Xiaoping did not have the data other than the fact he knew something had to be done differently when he embarked on the fundamental transformation of Chinese society in the late seventies.

When speed is more important than accuracy

In the fast moving business environment we are facing today, we do not always have the luxury of gathering all the data and conducting a comprehensive data analysis when time is the essence. In the business world, having something executed eighty percent right is in most cases better than one hundred percent right but nothing gets done. Analysis Paralysis and Death by the PowerPoint are some of the common symptoms of many organizations. When you are in a face to face negotiation, most often you would not be able to tell the other party that you need to take a data analytic break. Business judgement based on experience and intuition will have to come to play. Likewise, when Tom Brady needs to make a split second decision in a fast moving football game, he has to make that decision based on condition on the field and his intuition.

Finally, even when decisions need to be made by intuition and judgement, it is ideally validated and supported by data whenever possible. Data analysis can reinforce the decision and also help people develop better intuition and judgement. It is always important to have the right balance and know when to use evidence and when to use judgement.