I am an engineer by training, and my colleagues will tell you I am a data geek and spreadsheet aficionado. While I certainly respect and value information to guide decision-making, however, I think we often try too hard to hide behind the data. Most decisions involve dealing with an amount of uncertainty. That’s where data does not help as much.
I find it interesting that many people I encounter (especially in companies that employ highly technical staffs) are often reluctant to rely on their own instincts. Yet if I ask a group of executives or engineers if they have ever said to themselves (when looking back at a situation that has come to pass) “I knew I shouldn’t have done that”, or “my gut told me I should have done ‘B’ instead of ‘A’”, they virtually all raise their hands. Everyone I know has had that experience – and yet we seem to reject the idea of listening to our “inner voice”.
Flame-out at Miramar
A friend of mine was a Marine fighter pilot who told me about how he was making an approach in his F-14 Tomcat into Miramar Naval Air Station (outside San Diego). He had an engine failure over the Pacific and calmly proceeded to make his approach to the air base. He called to the Tower, declaring an emergency situation, requesting immediate permission to land on the main runway that was directly in front of him as he approached from the ocean. Now, Miramar is in a populated area and the Navy, concerned with its public image, is sensitive to making excessive noise in this densely populated corridor. The Tower told Dave he needed to circle around the field to make his approach from over the desert (where noise didn’t matter.) Dave had to make an instinctive decision, and he decided to disobey the Tower, making the landing he had initially intended.
As it turned out, Dave lost his second engine just before touching down, and in all likelihood would have crashed the plane had he circled around as ordered. Now, this was a highly trained Marine aviator who had practiced for such eventualities. He was also trained on rational decision-making — assessing all available data, processing it, considering alternatives, and making the best decision possible at the time.
When I asked Dave how he came to that specific decision, his response to me was simply this: “I just felt in my gut that I needed to land that plane . . . now”. There was no formal decision tree in his mind, no calculations, and no list of pro’s and con’s. Dave was called on the carpet for disobeying an order in this situation, of course, and I presume he had several debriefings and paperwork to attend to. But, thank God for his gut.
Choosing R&D Projects
Selecting among many competing R&D projects is a common analytical challenge for organizations whose strategy is based on extensive R&D investments. In my company, our goal was to have 20% of our sales revenue each year come from products that didn’t exist three years earlier. So choosing projects successfully was a big deal for us. R&D project ideas came from everywhere – our sales force, marketing teams, and our research and engineering staffs. We always had more project ideas than resources. So a real challenge is how you choose which ones to accept, and when it is time to kill them along the way if they don’t seem to show promise.
There are multiple analytical tools to help “analyze this situation”. One is called QFD (Quality Function Deployment – the link takes you to a primer on the subject) and the other popular one is Stage Gate. Both approaches involve creating a set of criteria for evaluating projects, allowing teams to rank them in some priority manner.
The methods are often appreciated by technical staffs for their rigor. They involve matrices of projects vs. ranking criteria, rating scales and ultimately precise tabulations that assign neat numerical values for each project depicting their relative worth.
I have used such systems in my own business and my impression is that while they have value, they also have limitations. What I saw in my company was that people initially tried hard to complete their matrices with great care. But in the end, when the ranking process did not give the “right” answers – eliminating some projects that our people “felt” were worthy – they became amazingly good at gaming the system.
So, while I definitely felt that a formal ranking system was helpful, we also had to allow for the discussion (even debate) about the projects that were eliminated. Again, in the face of uncertainty – it became a combination of hard data AND “gut feel”. What’s wrong with that?
Guys and Cars
My wife often teases me for being overly analytical when we are making major purchase decisions like buying a house or a car. I make lists, and I create criteria and ranking scales at home just like I was taught by my engineering and business professors. But she has often challenged me to consider that in reality, I have already made up my mind – and I’m just seeking to justify my decision with data after the fact. Or, I use the data as a way of demoting her choice in favor of mine. While this is a “tongue-in-cheek” comment, there is a lot of truth to it.
So, collect data if you must – but don’t dismiss your instinct, intuition, and gut.