How much information is considered too much information when it comes to business decisions?
There are people who believe they already know enough to handle just about any situation and they have come to rely on their gut instincts. These people are sometimes admired for this ability, but have wedone enough measuring to see if those gut choices are great decisions or merely good ones. And isn’t “gut instincts” just another term for being lucky?
Baseball managers sometimes “throw out the book” when they make difficult choices that aren’t supported by the game’s conventional wisdom, although going by the book often means relying on old measurements that are often based on incomplete data.
Observers of the game often are derided for studying new ways to solve old problems as if the game is some mysterious art form that can’t be broken down into basic building blocks that can be solved by a thorough examination of the problem.
In many ways, baseball managers are like underwriters. Many of them have been doing their job so long they feel their experience and their reaction to certain triggers enables them to make the right decisions.
Certainly those qualities put them in an excellent position as decision-makers, but as similar as circumstances may seem to be, we know that no two are ever identical and it is the wise person—armed with more than instinct—who recognizes even the most subtle of differences.
Predictive analytics has enhanced what underwriters do. It certainly hasn’t replaced the experience they have gained. That experience gives them the edge in knowing where to look for answers and a reminder that eventsdon’t always play out the same way.
We are hosting a Webinar on the use of analytics on Wednesday, March 28 called: The Analytics Gold Rush: Mountains of Data, Hidden Profits. (Don’t worry, if you miss the live event you can find it in our archives the following day.)
Steve Callahan of Robert E. Nolan Co. and Alan Rault of American Family Insurance will explain how vital analytics can be for the performance of your company. They have “the book” on analytics, but that hasn’t stopped them from being quizzical.
They also are able to take advantage of some new information they received from many of you. As part of the discussion, Nolan and Tech Decisions surveyed our readers on the subject and I’d like to share one small nugget with you.
When asked which factors leadership decisions typically rely on, experience is “almost always” relied on, which is hardly a surprise. The good news is intuition and collaborative consensus are “typical/common” for decision making, but the use of historical and predictive analytics is moving up among decision makers.
No one is using analytics “exclusively” according to the survey, which is also a good thing. Analytics, much like experience, is a tool for underwriters and business leaders to take advantage of. Combine it with other factors and you will get better decisions—the kind that makes you money.