The hype around data and analytics may lead many executives to assume that the answers to difficult questions—how much to raise prices, where to site a new retail store, whether one product will cannibalize another—can be found through aggressive number crunching. But does that mean that expert judgment and managerial intuition are obsolete? Hardly.
In fact, the full potential of quantitative analytics can be unlocked only when combined with business intuition. Mike Flowers, chief analytics officer for New York City under Mayor Bloomberg, explains the fallacy behind either-or thinking: “Intuition versus analytics is not a binary choice. I think expert intuition is the major missing component of all the chatter out there about analytics and being data driven.”
More successful companies seem to get that. In a survey of 600 companies in the United States and United Kingdom, Accenture Analytics found that data and intuition, when used in concert, correlate with higher returns on investment. Among those businesses that reported more than a 75 percent return on their analytics investments made over the last two years, slightly more than half said that their best decisions incorporated human expertise with rigorous data. For those companies that had a lower ROI, only 37 percent said they combined executive judgment with quantitative analytics.