3 Essentials to Make Better Decisions
Data science is only one of them
Have you ever wondered:
- How did Google dominate 92.1% of the search engine market share?
- How did Facebook achieve 74.1% of social media market share?
- How did Microsoft win over 77.7% of the Desktop OS market share?
Aside from great vision, they all decided on how they do things, leading them to their triumph. Google decided to focus its search engine to provide better user experience, instead of monetization. Learning from the early adopters, Facebook decided to plan its growth, time its entry, and manage its public relation wisely. Microsoft decided to build Windows with compatibility in mind, reducing future issues so they can innovate even more.
They all made great decisions, bet on it — and won.
As one who’s in the data science field, being data-driven is a must. Deciding our actions based on data is a normal thing to do. It’s in the job description after all. Yet, my mentor once said, “be more than a data scientist”. I figured out what it means later on. Not all problems can be solved using data. Maybe it can, but is it the best approach?
Other than data science and analytics, 2 more essentials could help us form better decisions. Finding the balance of all three is important since our decisions defines our future. Whether we want to solve personal matters, build a product, or start a business — we have to decide our next step.
Take a look at this graph. Imagine you have built a startup. These bars represent your monthly product sales.
- The first 8 bars show stable growth, which is good.
- You experiment and manage to growth hack it by 3 times next month.
- You’re happy, but have no absolute idea of what has happened.
Keep this graph in mind as you read through.
Analytics
According to Cambridge, analytics is a process in which a computer examines information using mathematical methods in order to find useful patterns.
Data is the new oil. Analytics help us achieve better business performance through insights from data. The demand for analytics is growing, giving rise to data scientists that became the sexiest job of the 21st century. Nowadays, most organizations have applied descriptive, prescriptive, and predictive analytics to unlock their full potentials.
I work in analytics myself. Most of my output is used to decide strategic moves and discover answers to business problems. Furthermore, it could transform new opportunities into realities. Without data, it’s like wandering with no direction.
Google even got a Chief Decision Scientist; ensuring the use of data and analytics to fuel the decisions on their products — or they called it decision intelligence. They invest in it in exchange for better business decisions.
The beauty data is — it’s based on fact. We can only find the truth with data.
- Is your new business working well?
- Can we reduce the cost?
- Which strategy is more efficient to put in place?
- How is the future trend?
Analytics can answer all these questions.
Say you have used quantitative data to optimize processes and fuel your business strategy. Your startup is growing at a constant rate until the 8th month. But, is that it? Don’t you want to raise the ceiling and go beyond? What else can you do?
Intuition
According to Cambridge, intuition is an ability to understand or know something immediately based on your feelings rather than facts.
How many times did you believe in your hunch and succeed? Probably a few times. Intuition just pops up in your mind before you know it. When done right, that instant idea may lead you to create major impacts.
People dreamt of going to space but very few are serious to think of how to get there. Elon Musk decided to believe his gut along with his vision. He then built an innovation, something that hasn’t existed yet. Now, he has proved that “SpaceX can do what it says it wants to do”.
However, an intuition like his is one-of-a-kind. What about the rest of us? We can’t quantify the value of someone’s intuition but the good news is: every person can strengthen his/her intuition by using it over time.
Still, it’s best practice to believe intuition when it’s validated by logic, reasoning, and data. I did trust my blind intuition at work once in a while and most of the time, it didn’t work well. Ideas build by feelings alone will more likely to fail. Relying on intuition alone can’t get you very far. After all, every journey is a marathon, not a sprint.
In the 9th month, you believe your intuition and implement a weird strategy. Your sales grew 3 times the next month. You’re happy. It’s unexpected. Although the real why remains a question.
Research
According to Cambridge, research is a detailed study of a subject, especially in order to discover (new) information or reach a (new) understanding.
Analytics are quantitative. Intuition is more or less a mystery. Research fills in the gap with its qualitative study. With it, we can gain a deeper understanding beyond feelings and numbers.
Apple took 1st place while Samsung took 6th place in the Best Global Brands 2019 by Interbrand. As a mobile phone vendor, they’re leading the industry with 30.9% and 24.8% market share worldwide. But that aside, let’s take a look at China’s Apple.
Unlike those top 2 who innovate as well as set the bar for its users, Xiaomi approaches it the other way around. Lei Jun built an ecosystem where “fans” co-design and evangelize their products. Lei diligently took into account all the researches together with feedbacks, then — took the 1st place of market share in India, blowing Samsung away.
We can use logic on numbers but empathy on feedbacks. Research can answer problems by understanding people. It goes well with one habit from 7 Habits of Highly Effective People — “seek first to understand, then to be understood”.
I keep this habit in mind when faced with problems that include several people. Understanding their point of view — think — then offer a solution. The result: we decided on a solution faster, without needless arguments. If you’re a data science enthusiast, consider reading more about other habits here.
No matter how good your analytics & intuitions, people are always involved. Listen to their voice.
Be aware though, too much research without good sense and data may lead to a false decision. One common mistake is poor research sampling: listening too much on the minority while overlooking the majority.
At the start of the 10th month, you connect and chat with your customers. Not two but many. Now that you understand the reason behind your sudden growth — you strike a new record with ease in the following month.
Congratulations! ✋
Finding the Balance
We make decisions every day. Some good, some bad. Take the bad ones as our learning curve and strive for better decisions every day. We are who we decide to be.
“I am not a product of my circumstances, I am a product of my decisions.” — Stephen R. Covey
To sum it up, these three essentials interconnect and empower each other:
1 Analytics will support and validate your intuition & research. It helps you to better sustain your venture and reach its greatest potential. Even so, clinging too much on it will get you nowhere.
2 Intuition can yield massive impact and act as a guide to extract valuable insights from your analytics & research. Believe in your hunches while backing it up with your experience. Wrong hunches may lead to failure.
3 Research enriches intuition & analytics by understanding the problem. Using qualitative insights, you can replicate your decision in more ways than one. Be sure to hear from all kinds of people though.
Remember: big decision carries a big risk. Balance all these 3 essentials to mitigate it and find your next best action.
This post was inspired by “#FirstPrinciples Ep06 with Ravi Mehta”. Thank you for sharing! 🙌
All market share data are the last 1 year from July 2020, sourced from Statcounter Global Stats.
