In this issue: How certain decisions can – and must – be supported with data. While others must depend on judgment and gut feel. How to pick the best approach, based on who at the firm we are talking to.
Experience
I was recently speaking with the CMO at a $1 billion fintech brand.
She told me that her peers and her Board are increasingly asking her for more and more data to justify her decisions. She gets that this is based on the pressure to make ‘the right’ choices, but she also feels that people around her often overestimate the power and value of data.
Everyone in business wants predictability.
Your ambiguous or ‘gut-based decisions’ can be seen by others as unsubstantiated, or worse, wasteful or incompetent. That judgment is especially shared by people who are most comfortable working with numbers all the time – like CFOs, COOs and some CEOs.
How is a marketer to win, when marketing is both predictable and mathematical, and also unpredictable and emotional?
Reflection
Based on my experience, when preparing to have a serious conversation, where a lot is at stake, it’s important to do a quick ‘self check-in’ and ask two questions:
(Are you dealing with someone who needs predictability and data?
OR
With someone who thrives on ambiguity and risk?)
AND
(Is the decision at hand so out of the ordinary or ambiguous that no data exists to substantiate it?
OR
Is there a lot of data available to help with that decision?)
Here is how I think about this:
The worst thing you can do is to be ambiguous and creative when sharing a recommendation to someone who needs predictability and doesn’t tolerate risk (i.e. be in the red, left upper corner).
Reserve creative conversations for people who thrive on risk, who love big ideas, and who understand that sometimes data doesn’t exist to back up an ambiguous decision (i.e. be in the green right upper corner).
References
According to several studies, quoted in the Harvard Business Review: “In the face of information overload, mounting risks and uncertainty, and intense pressures to make the right decisions, there is often debilitating evidence that delays our decision making. We put the choice off, rather than deciding. Trusting your gut allows leaders the freedom to move forward.”
Relying on gut feeling is not simply a spur of the moment decision. It’s a conscious choice to draw on data that comes from another source: from your experience and the insight you have gathered in your working life.
Laura Huang, associate professor of business administration at Harvard Business School, explicitly states this:
“Reserve your intuition for those decisions that go beyond routine, where calculations of probabilities and risks are not only unrealistic, they are infeasible.”
She goes on to explain: “What I learned from this study and others that I’ve conducted is that those who made more successful decisions based on their gut feel do the following:
- Recognize that their gut feel is not a separate piece of information but it draws on both objective and subjective information that is already available.
- Understand that gut feel is not quick, impulsive, and emotional – it’s actually something much more cultivated and nuanced and based on experience.
- Commit to continually cultivating their gut feel, by paying attention to exemplars, prototypes, patterns, and models in their field and linking what they learn to future decisions.”
I think what Laura Huang is saying is what the classic investment theory called ‘Risk Return Trade-offs’ actually recognizes: high returns are always connected with higher risks.
If your CFO, or anyone else who cherishes predictability, wants high returns with a high degree of predictability on your marketing campaigns, then she needs to remember that there is ‘no such thing as a free lunch’. Exceptional returns come at the cost of a high degree of risk or uncertainty – along with a sizable side order of faith.
Self-reflection for this coming week:
- Have you made a gut-based recommendation to a CFO because external data didn’t exist to validate it? How did that go?
- Conversely, have you had a math- and data-based conversation with a VP of brand and creative? How did that go?
If you’d like to discuss your career journey with me one-to-one, please feel free to email me at Greg@moveupfaster.me or message me on LinkedIn.
Thank you for reading.
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