There’s no doubt these days that to operate a successful 21st century business, leaders must understand the insights that data and analytics can provide. But according to Columbia Business School professor Oded Netzer, the Arthur J. Samberg Professor of Business and Vice Dean for Research, despite the increasing availability of data it doesn’t seem like decision making has become better or more efficient.
That’s why Netzer and his coauthors, CBS adjunct professors Christopher Frank and Paul Magnone, wrote Decisions Over Decimals: Striking the Balance Between Intuition and Information (Wiley 2022). Their new book suggests going beyond big data to make effective decisions combining analytics and intuition with data.
The book leverages the combined strengths of an academic researcher and two business executives who all co-teach the executive MBA elective Data-driven Leadership: Developing Quantitative Intuition (QI)™.
Magnone, head of global strategic alliances at Google and the Cloud Business, and Frank, vice president of Amexnsights at American Express, coined the term Quantitative Intuition to describe the combination of data and analytics with intuition and their process for blending precision questioning, contextual analysis, and synthesis to make effective decisions.
The following exchange is an edited version of a Bizcast podcast with the three authors and host Fahad Ahmed ’17, senior manager at Deloitte.
CBS: After co-teaching Data Driven Leadership for the past seven years, why did you decide to write a book?
Paul Magnone: There’s a lot of waste in the business world, and I, for one, am fatigued by all the wasted time, lack of efficiency, and lack of focus. What we're hoping to do is convert some folks into making decisions in a better way.
Christopher Frank: Another key thing is the speed of decision-making, which is an absolutely fundamental problem we collectively have to work on. I mean, businesses are working faster; data is flowing at an even greater rate in terms of volume and velocity. Yet, decisions almost seem slower. So there’s this tension that exists. And what we’re trying to share are really practical lessons, or a framework, to help relieve that tension.
CBS: Your book offers a roadmap for effective decision-making when using data. Where does the journey begin?
Oded Netzer: It starts with a decision. Ask yourself, “What is the decision I need to make? What data can help me make that decision?” And then focus just on that data and just on that analyses, as opposed to seemingly benefiting from the wealth of data.
We tend to drown in data these days and all the ways to analyze this data. That’s a way to procrastinate, a way to delay the decision by looking for more data, by looking at more analysis that hopefully would make us more certain with our decision-making. And often it doesn’t.
Frank: If you’re about to start a project, there’s a simple question that you ask: What do you wish you knew to move forward? So very quickly and very effectively by asking this forward question and applying this technique we call IWIK (I WIsh I Knew) across teams, across business units, you can get down to that essential information that you need to move forward, as opposed to drowning in the information that exists.
Magnone: Yeah, and I love the word wish in there because it implies permission, not an answer what you already think, but what is it that is ruminating in the back of your mind that you don’t think you can ask but you really can.
Netzer: One thing that actually goes throughout the book is this theme of powerful questions. In fact, if we go through the book, it’s a sequence of questions. “What data am I not seeing? What is the context for this data? What surprised me about the results?” That’s a very powerful question to get to the heart of almost any issue with data analysis. What surprised you? And finally, as we move towards the decision, questions like what does it mean, what does it mean for the company–moving from “what,” to “so what,” to “now what?” The entire sequence goes from the central question all the way to the decisions. So we think about using powerful questions in order to advance the dialogue.
Magnone: This is not about asking a precision question and getting an answer immediately but really opening up dialogue. If you use some of these techniques and you say, “Listen, I have an hour-long meeting, and if I frame it appropriately and condense things down into what is crystalline and clear in 10 minutes, then I can open up the next 50 minutes for real discussion.” And I think that’s the magic, opening it up for real discussion. If you open up the dialogue for actual synthesis and real creative thought, that’s the win. That’s what’s helpful to companies.
CBS: Where does quantitative intuition come in?
Netzer: Quantitative intuition is the ability to make decisions with incomplete information via precision questioning, contextual analysis, and synthesis to see the situation as a whole.
But intuition is almost primal. Can we teach something that is as primal as intuition? The theory of learning tells us that there are two dimensions to learning: There is consciousness and competence. At the lowest level of learning, we are so clueless that we are unconsciously incompetent. We don’t even know what we don’t know. And then maybe we open up a book called Decisions Over Decimals, and we see chapters about Quantitative Intuition. I still don’t know what it is, but at this point, I become consciously incompetent: At least I know what I don’t know. I start reading chapters, and I'm starting to become consciously competent, meaning I’m learning new things, but It’s still really hard. Unconsciously competent is the highest level of learning. Once we keep practicing a skill, it becomes second nature. It becomes habit; it becomes intuition.
This is the path to moving from learning something new to intuition. And we’ve all done that. We’ve all done that with walking. It was consciously difficult at the start. Same with driving. We learned these skills by doing them over and over again, and then they become intuitive.
Quantitative Intuition skills are like muscles, this ability to go from business problems down to the data and analysis only when needed, and then go back up. You need to repeatedly exercise them and they become intuitive.
CBS: How did the three of you synthesize all your insights into a book?
Magnone: One of the first keys is check your ego at the door, and we’re all in this together. We had to accept that upfront. And that was easy to accept in writing the book because we have been teaching together for seven years. But I think the other thing that we recognize about each other is, although we're teaching this material for a while now, we approach any given problem three different ways. I take very much a systems thinking point of view.
Netzer: I take the data view.
Frank: And I serve as that connector or bridge between the analysis and data and the business issue.
Magnone: So when you pull all that together, then you have an interesting story to tell. Our students look and say, “Wow, there’s three of you and there’s a cohesive view.” That’s what we try to capture.
Frank: I think we have to put the book into context. The book is an output of teaching this material at Columbia Business School. It’s really that intersection of theory and practice. We’re not only teaching at Columbia, Paul, Oded, and myself actually apply these every day in companies.
Magnone: Decision-making is a team sport. So, if one were to take our course, read this book, adopt all of it, and you’re the only one that’s doing that in your organization, it’s still an uphill climb. The key is to build a tribe–find that first follower, find that second one. Start to find folks and build some momentum within your organization for people who are intolerant of the waste of time and resources, who crave techniques to open up dialogue, which doesn't necessarily mean to move faster, but to have the real conversation that’s critical for your business. That’s not a single person activity. Find your tribe. And ideally, we're helping people find a tribe.
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