Gut Versus Analytics: What's the Real Story?

A recent article in CIO by Thomas Wailgum entitled "To Hell With Business Intelligence: 40 Percent of Execs Trust Gut" caught my attention. There were also a couple dozen comments that are worth reading as well as a blog by Marcus Borba. This was driven by some recent (separate) research by Accenture and Forrester to examine how business managers are using analytics as opposed to intuition or gut feel. I think they left out one category, though. James Taylor and I wrote that many decisions are simply avoided or hidden because people really don't know what to rely on, but that's a different topic.

Let's get back to the subject of the article. It is no coincidence that there are so many phrases that depict thinking guts. There is gut reaction, gut feeling, gut instinct and, related but even more evocative, butterflies in the stomach. As it turns out, there are good reasons for these terms because your gut actually can think, in its own fashion. In "Lights Out: Sleep, Sugar and Survival," T.S. Wiley, Pocket Books, 2000 (full disclosure: T.S. Wiley is my wife), the author writes:"...the gut was your original brain. As we slithered across a rock, pre- 'head brain,' the neurotransmitters we know, like dopamine, serotonin and norepinephrine, and hormones like adrenaline and insulin ran The Project from your midsection."

Great book and I hope everyone goes out and buys it. Wiley explains that your gut is lined with neural cells that even to this day act as a primitive second brain, especially in their role of managing your immune system, which can be considered more or less sentient. So let's not be so down on that gut thing.

Back to the argument at hand. First of all, I would hope that 100% (not 40%) of execs trust their gut, but I think the proper phrasing of this question is, do they rely on it to the exclusion fact-based reasoning? I don't think you can separate gut from analytics, because all analytics can do is inform your decision and at some point you have to apply your gut to the analytics.

This is all pretty silly, though, because if you deconstruct the argument, what it really means is "I don't understand analytics so I'm going to make this argument about the value of my gut." Any rational person can see the value in both.

In 1996, I was on a Guru Panel at one of the first TDWI conferences (in fact, it may have been the first). To my right was Bill Inmon and on my left, Herb Edelstein. Alan Paller was moderating and a woman in the back asked this question: "Why do we need all of this data? Don't the men (yes, she said men) who run these companies just use their instinct?"

Alan was walking towards me with the microphone and I was dreading having to respond, but as luck would have it, at the last second, he passed me and handed the microphone to Herb.

Herb gave a heavy sigh, and I could see he had no more enthusiasm for this question than I did, but he brightened up and here is what he said:

"Let me tell you how to run a $100 million company. First, start with a billion dollar company, then run it on intuition."A recent article in CIO by Thomas Wailgum entitled "To Hell With Business Intelligence: 40 Percent of Execs Trust Gut" caught my attention. This was driven by some recent (separate) research by Accenture and Forrester to examine how business managers are using analytics, as opposed to... gut reaction, gut feeling, gut instinct and, related but even more evocative, butterflies in the stomach.