Decision-making: data-driven or gut-based?

I had a long talk with a prospective customer this week. We started with the basics:

• What's their business?
• What is their position in the market?
• What market forces are affecting them?
• What are their specific challenges around data?
• What data do they have available?

Then we came to a fundamental question:

How much do they want to learn from their data?

This is where the conversation started to change. They face a specific problem with their data, effectively a problem of getting all their data onto the same page. But at the same time, there are 3 forces actively working against them solving that problem.

1. Their procurement process is difficult for vendors to navigate. Multiple projects have been derailed because of this.
2. They are far and way the dominant player in the market, and as the saying goes, "If it ain't broke, don't fix it."
3. They are still in the mode of making decisions by gut feeling and collective discussion, rather than being data-driven.

The last point is the killer. Some of their management team is scared of change. With regards to data, change has the potential to expose wrong decisions that have been made in the past. They've never faced scrutiny.

Unfortunately, this is a bad position to be in. Why?

Resistance to data will doom your company.

To quote Steven Levitt, co-author of Freakanomics:

The premise of the question is that these old organizations that are resistant to data will survive or are surviving. But in fact they’re certainly not thriving.

So the fact is that the future is in your hands.

Continue making gut-based decisions, and perish. Or embrace data, and thrive. OK, so maybe it's not quite that dire. But history has shown, time and again, that companies that rest on their laurels, may not get to rest very long. Perhaps it's time to change that decision-making strategy.