Many senior managers in New Zealand businesses have an inherent distrust of big data, opting instead to rely on their own intuition.
That’s according to research from Massey University School of Management’s Dr Nazim Taskin and professor David Pauleen, who examined the impact of data analytics on managerial decision-making.
Taskin, Pauleen and colleagues from the University of Auckland as well as Queensland University, surveyed 116 managers from 116 medium-and-large New Zealand businesses.
Survey participants reported being cautious about analytics in decision-making because they are concerned about the reliability of data.
“Nearly two-thirds of the managers interviewed said they had no confidence or trust in big data, preferring to rely instead on their intuition and experience to make decisions,” explains Taskin.
Despite the prevalence of big data, many respondents don’t fully understand what is involved, respondents also admitted.
“One quarter of participants also confessed they had only a modest knowledge of what big data is, or what it can do,” says Taskin.
Of those who preferred big data to intuition, they were often mid-level managers who were not able to use big data insights for strategic company decisions.
Mid-level managers are often in conflict with top executives because they have different understandings of the value of big data.
According to the study, mid-level managers tended to seek insights to improve business processes, while top-level executives sought insights to improve the company’s bottom line.
But those at the top who make the real decisions may not know enough about big data and analytics tools to use them properly.
“Our research revealed top executives are generally not as competent as they could be in using analytic tools and techniques,” says Taskin.
“It seems they rely on other managers within the organisation to generate big data insights, and those insights are used to confirm their own intuition or are ignored if they conflict with their gut feeling.”
Taskin adds that analytics should be a complement to intuition, not a replacement. However, top level executives need to know how to judge the ethical implications, relevance, and value of big data insights.
“Simply collecting data without the skills to analyse it is costly, and analysis without direction can be deadly,” Taskin explains.
“On a positive note, it’s clear that once a manager experiences good outcomes with big data, it builds confidence in applying analytics tools more regularly.”
Taskin is now conducting further research to understand the ‘impact of intuition and data analytics on decision-making among senior managers’.
“We hope further investigation will allow us to identify the factors inhibiting the effective use of big data, and how these might be remedied,” Taskin concludes.