Conducting business in
21st century often requires quick decisions. This often leads to sound data being replaced by perception as basis for making important resolutions. The risks in this approach are clear: business decisions made without a solid grounding in reality can lead to disaster. Last week, former head of collapsed Australian insurer HIH made a startling admission. He said that 'gut feel' had formed basis of HIH's decision to takeover its smaller competitor, FAI. The takeover turned out to be a grave mistake - and a significant contributor to demise of HIH.
Now this was a Big Decision with Big Consequences. But smaller examples abound and while they might not send businesses broke, they can easily result in nasty surprises and wasted money.
Equipment purchases, hiring of extra staff, advertising campaigns, moving to bigger premises, etc. etc. Decisions to do any of these are often based on perception, impulse or 'gut feel', rather than on even simplest analysis.
This should not be surprising. On one hand, we make personal buying decisions every day based on perceptions enhanced by marketing. It is part of our modern conditioning.
On other hand, despite fact we live in an age of abundant information, only a selected few have learnt how to use that information effectively. For most, doing even most rudimentary analysis seems all too hard. Perception wins out - and another riskier-than-necessary decision is made.
The solution to this problem is simpler than you may think. You need to learn mystical art of analysis.
