Insight-Driven Innovation

This Conversation on the Future of Business is brought to you by SAP & MIT Technology Review Custom

In responding to a question of this nature, it’s easy to pit human intuition against data, comparing and contrasting their relative strengths and arguing in favor of one over the other, the way one might argue for art over science. But while taking sides on this important issue generates interesting and passionate discussion, it fails to take into account a basic truth about decision-making: humans seamlessly combine instinct, gut, experience, and data in nearly every decision they make, both personal and professional. These capacities are not the least bit mutually exclusive.

“Experience and gut rely on data to grow,” explains @Phil. “So, I see no opposition between instinct, experience, gut, and data.”

We agree with this sentiment. However, the ascent of Big Data and the insight it affords does tip the balance. Data analytics brings new information to bear, exposes unseen patterns, answers unasked questions, and even predicts what will happen. In this way, it necessarily encroaches upon the role of gut in decision-making. And this has profound implications for corporate culture and leadership. At the very least, decision-makers will need to develop a more open, balanced approach to strategy, and they must be willing to accept data that contradicts established practices and long-held beliefs.

Sound Off Join the conversation around each of the questions in this series:

• Optimizing Resources Amid Increasing Scarcity
• The Power of Networks
• Insight-Driven Innovation
• Customer Centricity
• Unlocking Human Potential

Of course, not all decisions are created equal, and not all require the same mix of instinct, experience, and data. “Data will play a huge role in supporting and validating some types of innovation, but not … disruptive innovations,” says @mjoel. “As Professor Clayton Christensen of Harvard Business School puts it, there are three types of innovation: disruptive empowering innovations, sustaining innovations and efficiency innovations. The sustaining and efficiency innovations can be tremendously supported by data as they provide leaders with necessary insights on things like customer preferences, the efficiency benchmarks for various processes, the new customers that can be tapped, etc. But disruptive empowering innovations need divergent thinking combined with instinct and gut.”

Indeed, innovation will always require risks, some that can’t be quantified, and some that will demand imagination and insight on a very human level. Data will help shape and guide risk-taking, giving direction and clarity to innovative thinking. It provides a basis for the confidence that business leaders need in order to assess viable options, select the ones with the highest probability of success, and put them into action – quickly. But experience and instinct will continue to matter a great deal. In fact, some of our readers argued that experience and instinct are merely data in disguise: the long-term accumulation of both unstructured and structured information. 

Ultimately, business leaders will need to decide in whatever scenario they encounter just how persuasive data is, how faithfully it can be followed, and how comfortable they are ignoring it. Those who master this delicate balance will be well positioned during this age of data-driven innovation.

“In my experience, business decisions today are almost always part gut, part science,” says @Dog21. “I don’t think these roles will change much in a data-driven innovation culture. At the end of the day, we’re human and will rely on experience, gut and instinct validated by the data. The two will continue to work in sync with each other.”