Or do you?
While your gut helped you get to where you are today, things have changed. Your business is now bigger, with more moving parts, more employee activity, and more sources of data than ever before. This can cause your gut to work against you for in two ways. Here’s how to fight back.
Problem 1: Confirmation Bias
In psychology, a confirmation bias is the tendency to gravitate toward data that confirms your current beliefs and hypothesis and ignore contrary information.
A great example of this occurs when you interview a candidate whose resume has you convinced that she is highly intelligent. During the interview your confirmation bias makes you predisposed to focusing on the candidate’s answers which confirm your belief and discount information which challenge that belief.
This can happen throughout your business. As a manager who relies mostly on gut with sprinkles of data, you will focus most on information that supports your gut. But what about the data you are missing or ignoring? The resulting overconfidence in your gut makes it harder to identify real problems and react in time.
Problem 2: Generalizations & Projections
As a manager you use past experience to generalize issues and respond similarly when things look similar to what you’ve seen before.
However, generalization can lead to problems when combined with projection, the mechanism by which you take your beliefs and ascribe them to other people or events. The danger is that it can cover up problems or strengths which data would otherwise have revealed.
For example, you may believe in the generalized 10-3-1 ratio (10 sendouts, 3 interviews, 1 placement) based on your prior experience as a recruiter. And now as a business manager, you project that ratio onto your employees and conclude that a rep who isn’t getting enough placements must not be doing enough sendouts. But do you really know that? It could be that your rep isn’t failing, but perhaps the client is being too picky in the interviews, or that the opportunity requires a very specific skill set and far more activity is required.
The mental models you create lead to many useful shortcuts in your business, but also leave you exposed to miss some underlying issues.
Gut + Data
So what can you do about it? Your gut is still useful, but it can’t be the only arrow in the quiver. You need to augment it with data.
To counter your confirmation bias, ensure you are analyzing all of the data across your system. This can be overwhelming, so make sure you find reports that are simple and intuitive in order to process it all.
Second, make sure you are able to dig deep on issues and investigate the root causes on a case by case basis. To do this, it is critical you have an agile system of reporting that lets you see broad trends as well as dive down into the daily activity.