Gut and gigabytes:

The art and science of big decisions

By Dan DiFilippo, Global and US Data and Analytics Leader, PwC

What would you do if a pair of headlights was

zooming right for you at high speed on an
otherwise empty turnpike?

Most people would probably go with their gut and switch

lanes. But what if youre an insurance expert who knows
that, in nearly all cases, the wrong-way driver changes
lanes at the last minute? Do you obey the data and stay in
your lane, risking a head-on collision? Or do you heed your
instinct and switch lanes, still risking a head-on collision?
For the person who described this scenario, the situation
wasnt hypothetical: He was the driver whod been traveling
in the right direction, straight toward the oncoming
headlights. The reason he lived to tell the tale (decades
later) was that he followed his gut, switching lanes just
in time. The other vehicle never wavered, sped right past.
As this example makes all too evident, tough decisions are
freighted with contingencies. Both options available to the
driver (stay put or switch lanes) entailed the probability
of a head-on collision. But in his case, there wasnt time to
engage in higher-order thinking vis--vis the contingencies,
and so instincts role in decision-making took the drivers
seat. What this anecdote also underscores, however, is
the flip side of the coin (the science side): The insurance
industry was big on data way before big data got to be a big
deal. For instance theres good reason for the reverse-gender

discrimination in car insurance pricing for teen drivers, and

its a decision thats been driven by data for a long time.1
The depth and breadth of todays data is way beyond the
magnitude of the 1960s statistics our anecdotes driver
called to mind. And todays data is being relied on by
businesses generally, not just by those in the insurance
industry. But to what degree? In this new era of big data
and predictive analytics, organizations could be tempted to
discount intuitive thinking in favor of decision-making by
the numbers, and yet thats not the actual case at present.
Right now, intuition still prevails, with the majority
of corporate decision-makers finding that listening
to their gut is preferable to paralysis by analysis.
More and more, however, executives will be pressed to
defend their choices against contrary outcomes that were
plainly visible in the data tea leaves. The key isnt to favor
one approach over the other art versus science but
rather to cultivate and hone the role that instinct plays in
our increasingly data-driven world (or, conversely, hone the
role that data plays in our intuition-prone decision-making).

Art = painting by number

Despite modern neurosciences revelation that
the alleged dichotomy between the right-brain
(art) and left-brain (science) is a false one, old
myths die hard. And so while todays executives
recognize and acknowledge the importance
of having data be a large part of the decisionmaking mix, theyre still on the fence about
it. This is curious, considering that a recent
PwC survey 2 of senior executives, conducted

2
4

by the Economist Intelligence Unit, shows that

theres simply too much on the line to give data
analytics the short shrift in favor of relying
mostly on right brain cues: Respondents said
that the average value of their big decisions was
25% of future profitability. Nearly two-thirds
pegged their next big decision at a value of $100
million or more (almost one-third put it in the
$1 to 5 billion range). Clearly, it matters how
businesses approach these pivotal decisions.

nature of the data, the context in which the

data was gathered (e.g., the goal/motive/
hypothesis of the data collector), and a host
of other variables affects the numbers that you,
as a decision-maker, ultimately review. The
art part of making data-supported decisions
happens when you bridge the gap between
the hard numbers, on the one side, and a
consortium of common sense, experience,
and time-honed instincts, on the other side.
Equally important is getting the right numbers
at the right time. Lack of timeliness may be
why so many executives remain skeptical of
datas usefulness to them. Organizations that do
harness speedily delivered (yet well-crunched)
information can make multiple strategic
decisions in the time that it would take a slower
competitor to reach just one decision allowing
the former to jump on fleeting opportunities
that the latter cant act on quickly enough.
A steady stream of timely data also enables
companies to routinely revisit their decisions
and assess whether they need to change course,
which helps businesses be more deliberate, less
reactive. Indeed, executives whove embraced
timely data analytics are nearly three times as
likely to report significant improvements in
decision-making than their data-wary peers.4

Decision-making styles
Substantially more companies describe their
biggest decisions as opportunistic rather than
deliberate, making it essential to have rapid access
to proven analytics that draw on high-integrity data.

Nonetheless, there remains a fundamental

skepticism about if not outright frustration
with the practical use of data in big decisions
at the executive level. Almost half of executives
admit to having encountered and abandoned
unclear data in the past; a large majority goes
so far as to profess that relying on data analytics
has actually been detrimental to their business.3
In short, you might say these executives
equate nuanced thinking with connecting
the dots, and dismiss data-driven decisions
as something akin to painting by numbers.
But as anyone who works with data can tell
you, numbers are nuanced too. Its important to
crunch them with care so that you dont in fact
end up with paint-by-number decisions. The

Opportunistic
Delayed
Deliberate
Experimental
Reactive
Mandatory

0%

10%

20%

30%

40%

50%

Executives in data-driven
organizations are

3x
Data doesnt create meaning, we
do: Blending technical capabilities
with business acumen
As industry analyst Susan Etlinger points out,
these days we can process exabytes of data at
lightning speed and so have the potential to make
bad decisions far more quickly, efficiently, and
with far greater impact than we did in the past.5
Thats why business acumen is every bit as
vital as technical capabilities. Without it, the
sheer volume and speed of datapoints can
be overwhelming, making it hard to see the
forest for the trees. Miles Reiter, CEO of the
international berry producer Driscolls, puts
it this way: These days everybodys getting
more data than they really know how to handle.
But he says thats changing. Eventually, youll
be able to look into every link in the supply
chain. That allows us to evaluate how well each
grower is doing and make better choices.6

more likely to report

signicant improvements
in their decisions

At the end of the day, those of us who embrace

a data-driven approach to decision-making7 will
need to have confidence in the inputs and then
bring to bear intuitive common-sense insights,
asking ourselves the question that Etlinger poses:
Did the data really show us this?
And if we do that the result?
A more-comprehensive corporate intelligence
that drives every decision throughout our
organization and the clients we support,
with consistently positive outcomes.

Dig deeper: PwCs Global Data & Analytics Survey 2014: Big Decisions
1
2
3
4
5
6
7

Teen Drivers: Get the Facts, Centers for Disease Control and Prevention
PwCs Global Data & Analytics Survey 2014: Big Decisions
Ibid
Ibid
What Do We Do with All This Big Data? TED, Susan Etlinger
US Family Business Survey, PwC, 2015
That includes most US CEOs 89% of them see value in unlocking data: 18th US CEO Survey, PwC, 2015
3

For more information

To learn more about PwCs Data and Analytics practice, please contact:
Dan DiFilippo
Global and US Data and Analytics Leader
+1 (646) 471-8426
dan.difilippo@us.pwc.com

Paul Blase
Global and US Data and Analytics Advisory Leader
+1 (312) 282-1015
paul.blase@us.pwc.com

Scott Greenfield
US Data and Analytics Assurance Leader
+1 (646) 471-5383
scott.greenfield@us.pwc.com

Rob Baldwin
Global and US Data and Analytics Tax Leader
+1 (214) 754-4535
robert.baldwin@us.pwc.com

www.pwc.com/bigdecisions

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