Sunday, 17 July 2011

Intuition Versus Data and Research for Decision Making: Blink and The Innovators Dilemma


During my Christmas break I read 2 books I have wanted to read for while and needed a relaxing holiday to do them justice. Both are not new books, Blink: The Power of Thinking Without Thinking [2006] by my favorite author Malcolm Gladwell and a very old strategy/management classic The Innovators Dilemma: When New Technologies Cause Great Firms to Fail [1996] by Clayton M. Christensen, which I had already read in parts back in early 2000.

Although I was totally engrossed in these books and thoroughly enjoyed them both, I also ended them with a feeling that they had both misrepresented the real importance of research, data and intelligence/insight. Before I go into more detail on my bitter sweet feeling, let me begin by summarizing both books briefly and highlighting the bone I have to pick with both books.

Malcolm Gladwell author of Blink, explains using cases/situations from different areas of life and diverse disciplines, how important our subconscious and intuitive decision making is. This way of thinking without thinking, he also calls “thin slicing” more commonly known as your gut feeling or hunch or split second decision. ''We are innately suspicious of this kind of rapid cognition,'' Gladwell observes. We assume that long, methodical investigation yields more reliable conclusions than a snap judgment. But in fact, ''decisions made very quickly can be every bit as good as decisions made cautiously and deliberately.''

This lack of belief in research and intelligence and impressions being as reliable as data, is where I feel his book could easily be misconstrued by readers and it doesn’t sit well with me as a measurable marketer. I am not alone in this feeling, David Brooks in the New York Times questions “What is the relationship between self-conscious reason and backstage intuition? Which one is right more often?”

Clayton M. Christensen, author of The Innovators Dilemma, explains also using cases and research from different industries, how established companies by listening to their existing customers, thrive through sustained innovation, but flounder with disruptive innovation. He claims that the best practices of listening to customers and innovating based on what their needs and wants, actually results in leading companies, falling behind in the face of disruptive technologies. 

“It was as if the leading firms were held captive by their customers, enabling attacking entrant firms to topple the incumbent industry leaders each time a disruptive technology emerged”. Christensen also goes on to claim that the markets for disruptive technology are ‘unknowable’ and ‘unforecastable’. He claims that  intuition and trial and error, rather than formal data and research enable entrant firms to find emerging markets for their new value proposition which are often more straightforward than the incumbent technology. 

He misinforms the reader when he says “well managed market leaders listen to customers, investors and employees, all of which work against the process of pioneering disruptive innovations.”

In both cases these books mislead readers into thinking that there is no value in research or data. This is fundamentally wrong. The problem is overload of data and information, using a very small segment of customers/consumers and not using a balanced combination of techniques. Intuition and hunches will always become better decisions if backed up by observation and data, especially due to the legitimacy factor. By looking at drivers and trends in industries and a company's external environment, it is possible to identify disruptive innovations and not just create iterations of current products and services [ie. better, faster, smaller, bigger, tastier], which is what often happens with you ask your customers what they expect, it is not surprising you get the answer "we want more of the same, for less money". 

The important thing when it comes to decision making, is to use a balanced combination of the following inputs:
  1. Actual data on what is happening, from internal data sources [CRM, financial reports etc] [Data]
  2. Asking and listening - stakeholders [including employees], customers and non customers [Research]
  3. Observing and watching - customers and non customers [Qualitative research input]
  4. Gut feel, experience and sensing capabilities of the decision maker [Intuition]

1 comment:

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