Newsweek recently published an article that should be sending shock waves through the business intelligence (BI) market, populated with vendors like Business Objects, Cognos, and MicroStrategy.
BI tools help business people get access to information in corporate databases and data warehouses, so they can make better business decisions. In fact, if you looked at the tag lines for these vendors over the years, they consistently played off the theme of knowing more and therefore making better decisions:
- Better decisions every day
- Now you now
- The power to know
- Business intelligence: if you have it you know
- [Mumble, mumble] something about insight [with lots of black] (poking fun at BOBJ’s “margeketing”)
My interest in this implicit premise led me to research how people made decisions, enjoying books like Decision Traps by J. Edward Russo, its newer sequel Winning Decisions, and Smart Choices by John Hammond. After all, in the BI world, if we were in the business of providing better information for making better decisions, maybe we should learn something — and perhaps try to help improve — the next step down the line.
But what if the premise were flawed? What if more information didn’t help improve decision quality? I remember asking J. Edward Russo (who is both a psychology and business professor) what people would most likely do with increased access to information? His answer: selectively filter the information to justify already made decisions. Hum.
In the end I concluded two things:
- Selling “better decisions” wouldn’t work because most people — particularly executives — don’t think they have a problem. “I’m a great decision maker; look how far I’ve gotten in my career.”
- If that weren’t enough, given my reading, I felt that the first thing companies could do to improve organizational decision making would be to systematically record votes on major decisions and periodically review the decisions and who voted which way. When I proposed we do precisely that at Business Objects, executives scattered faster than cockroaches with the lights turned on.
Clearly, while there was a big market for “more information,” demand for “better decisions” seemed lacking.
So what does Newsweek have to say? Almost in the Blink school of thought, there’s a new book out called Gut Feelings that argues our subconscious can do a pretty good job filtering and processing information.
Hunches, gut feelings, intuition—these are all colloquial English for what Gigerenzer and his colleagues call “heuristics,” fast and efficient cognitive shortcuts that (according to the emerging theory) can help us negotiate life, if we let them.
Gigerenzer calls such decision making “satisficing,” as in “satisfying” enough to “suffice.” Satisficers don’t feel the need to know everything, in contrast to “maximizers,” who do want to weigh every detail imaginable in making even minor life decisions. Interestingly, studies have found that satisficers are more optimistic about life, have higher self-esteem, and are generally happier than maximizers.
The whole story reminds me a humorous moment in my marketing career. We were running the BI Summit, a top-end executive event in the UK. We had Michael Heseltine, a member of parliament, secretary, prominent UK politician and businessman as our keynote speaker. We were donig Q&A in an interview format and the interviewer — on ear-bud prompt by our UK marketing director — kept asking increasingly leading questions about the power of information in making decisions.
And then he pressed once too far. It was many years ago, but as I recall it went something like this:
Interviewer [building in hyperbole]: Well, then, would you say that some of the best decisions you ever made in your life were based on data and analysis?
Heseltine: Well, in fact, no. No, I wouldn’t. I remember when we decided to start [magazine X] just having a flash of intuitive brilliance in looking at a newsstand and realizing there was no publication in the [X] space. In fact, well, I think I’d say that some of the best decisions I’ve ever made have been based on pure instinct and intuition. No data at all, really.
There’s a lesson on decision-making in there. And one on over-reaching as well.