Like all of us, executives make their decisions in an instant based on their gut instincts.
As a thinker (MBTI = ENTP), I have come to believe that all of our decisions are instinctual and we rationalize and justify these emotional actions analytically---in our neocortical brain like a well programmed computer. This from-the-gut decision-making finds support in Malcolm Gladwell's book, Blink (Little Brown, 2005), which promotes decision concepts around what Gladwell refers to as the adaptive unconscious: "Decisions made very quickly can be every bit as good as decisions made cautiously and deliberately."
Actions taken in "a blink" often are based on years of experience and insight that has been thoroughly digested before that seemingly instantaneous decision. In the corporate environment, years of corporate information is being systematized in Business Intelligence (BI) structured databases and various applications to leverage the aggregation and digestion of the organization's collective and adaptive experience. These BI applications use statistical and quantitative analysis, including explanatory and predictive models, to drive management decisions and actions.
Management consulting firms and BI technology companies identify management information for global decision-making as their number one priority. "In a study we did last year, 53 percent of the executives surveyed wanted better information for management decision-making," reports Jeanne Harris, director of research at the Accenture Institute for High Performance Business and coauthor of Competing on Analytics (Harvard Business School Press, 2007).
Executives appear to have a good handle on their financial information but when it comes to reporting nonfinancial performance measures, 40 percent, in a recent Deloitte study, rated their company at best as average while 23 percent gave their company fair or even poor marks.
To satisfy this management need, the highly fragmented BI technology market is taking form through teaming relationships and acquisitions. For example, Accenture is teaming with BI analytics vendor SAS while the consulting firm maintains alliances with Oracle and Hyperion. Oracle recently announced plans to acquire Hyperion Solutions to merge Hyperion's BI capabilities (being used by 12,000 corporate customers) with its own BI functionality.
The BI challenge today is the vast amount of enterprise data must be captured, processed, aggregated, and presented well to make sense of it. The data mining story about diapers and beer illustrates the value of BI in decision making. Someone looked at sales data, moved displays around, looked at the data again, and discovered that the store would sell more beer on Friday afternoon and Saturday mornings if it displayed the beer next to the diapers near the checkout counter. That's the kind of a BI tool that operational managers seek to justify their instinctual reasoning and boost the performance of their business unit.
Source: Consulting, May/June 2007