63% of Business Executives say Analytics Overrule “Gut Instinct”
We have all heard it before; “people judge you within 7 seconds of meeting you.” It’s the reason we buy new dress clothes for job interviews and spend time making sure there is nothing on our face before we walk in the door for our first day.
This rule doesn’t only apply to just people, however. Try watching a show like Dragon’s Den or Shark Tank, and not evaluating someone’s business pitch right after they give their, “ask.” A large share of this is the trustworthiness. It’s embedded in us as humans, we immediately evaluate “fight or flight.”
Now, before predictive analytics, executives and those alike evaluating business ventures, partners, or job-candidates, had to rely on a gut feeling. This was the Descriptive Phase. We looked at what happened and used that to predict the future. “This candidate made their company $200,000 last year, if we hire them, we should expect something similar.”
As analytics developed, we came into the Diagnostic phase, where we looked at why something happened. “This business was able to diversify their risk against market downturns. Why? They used call options.” Instead of just looking at what happened, we investigated to find out why it happened. However, we still used our gut to make a call. There was nothing to help us back up decisions we made on that understanding.
As we entered the Predictive phase, where companies could use data to not only analyze past results but predict future results, we could solidly our decisions in data. Every move we make can consider all available data on the Internet and beyond, provided you can access it.
What’s happening in the marketplace?
So, why aren’t all businesses instituting analytics in their business ASAP, and what is happening to the ones who are?
65% of businesses in North America leverage some form of descriptive analytics, but only 30% of those same businesses are leveraging predictive analytics. Even further, only 18% of these companies feel they are seeing a positive ROI on their analytics investment.
The answer lies in a couple of areas but can be generalized by a few issues; poor data quality, businesspersons’ inability to describe the tangible benefits of analytics, and inadequate analyst training, (to understand and articulate what the data is proving). The Harvard Business Review study found that many of these businesses had
But what about the companies where management felt the analytics were working? In these businesses, 63% of executives responded to a Harvard Business Review survey saying they could see a positive impact on their Key Performance Indicators when they implemented predictive analytics. As a result, HBR concluded these companies were better at identifying problem areas and making the necessary adjustments to fix it.
When interviewed for the Harvard Business Review Report, Lori Bieda, BMO’s head of the Analytics Centre of Excellence, Personal and Business Bank said, “Insights are the easy part, but you have to take rapid action on them to gain competitive advantage.” This is where tools like the Predictive Index can help businesses align their business and people strategies. By employing analytics for teams and employees, the Predictive Index gives suggestions for managing employees to build long term stars and cultural champions.
How can you use analytics in your business?
The Predictive Index combats the common issues companies have with analytics programs, providing concrete action items, and easy to use interface, and tangible measures of talent optimization.
To find out how your team can institute Predictive analytics in their hiring and operations, click here, or email Hannah Harrison at firstname.lastname@example.org
To learn more about the HBR study, visit: https://hbr.org/sponsored/2018/05/uncovering-the-keys-to-becoming-truly-analytics-driven