Massey University has released the results of a study that reveals many top executives are failing to capitalise on the capabilities of data analytics, preferring to rely on their own intuition.
According to Dr Nazim Taskin from Massey’s School of Management, almost two-thirds of managers interviewed said they had no confidence or trust in big data. Also, he said, while there is growing awareness of big data, most managers are cautious about using analytics for making decisions due to concerns about data reliability.
“One-quarter of participants also confessed they had only a modest knowledge of what big data is, or what it can do.
“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 warned that “analysis without direction can be deadly.” However, he said intuition should not be ignored. “Data analytics should complement, not replace, intuition. But, to make wise decisions, top level executives need to be able to judge the relevance, value and ethical implications of big data insights.”
The study also found those who favoured analytics over intuition were often mid-level managers who were not in a position to use big data insights for strategic company decisions.
And it found differing notions of the value of big data across the two groups. Mid-level managers tended to seek insights to improve business processes, while top-level executives sought insights to improve the company’s bottom line.
Taskin is now undertaking further research to better 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,” he said.
Taskin along with professor David Pauleen and Dr Ali Intezari surveyed 116 managers from predominantly large and medium-sized New Zealand businesses to examine the impact of data analytics on managerial decision-making.