Gut versus Data

Recently ousted CEO of JCPenney, Ron Johnson, was slammed for relying too much on intuition versus hard data as he led the revamping of the JCPenney stores. He embraced vision and inspiration at the expense of surveys, focus groups, and feedback loops. He embraced this approach through his successful stint with Steve Jobs at Apple where they valued and embraced such a philosophy. Most will agree that JCP’s new stores are very creative and well done…yet, the company is in a free fall. What went wrong?

The burning questions include: “Is this what the customer wanted?” “Do THEY like the change?” “Was this just too much change too quickly?”

This CEO fallout is just one of many over the course of the past few years. Think about Leo Apothaker, the poor choice to take over HP after Mark Hurd. What about Kevin Rollins, the ousted CEO of Dell, who was criticized for over-promising and under delivering? And consider Bob Nardelli, the gaffe-prone CEO of Chrysler who though he had strong experience from General Electric, was ill equipped to lead the complex business of making cars.

This blog is not about the high stakes of running large, global, blue-chip companies. However, it is about how CEOs and leaders at all levels find the right balance of intuition or “gut feel” versus solely data driven decisions.

My friend, Dr. Noel Tichy, has written several books on how leaders make decisions or, in his terminology, how they make good judgment calls. He and co-author Warren Bennis give numerous testimonies in their book Judgment of CEOs and their hard calls. They dissect the process of how those calls were made around people, strategy, and actual crisis.

At the end of the day, leadership is all about making decisions, getting our teams aligned and rallied around those decisions,  and being able to sell the story to the rank-and-file.

So, is it gut or data? I believe it is certainly a combination. I am a huge believer in the power of intuition AND I also believe these decisions must be anchored by facts – i.e. data.

And, as Noel would say, “With good judgment, little else matters. Without it, nothing else matters.”

What is your point of view? Has following your gut ever gotten you in trouble? Has ever NOT following your gut put you in a compromised situation?

3 responses to “Gut versus Data

  1. Kristin…… I have experienced trouble with both . I am working as a Primary care Physician. I trained as a surgeon for some years , having qualified In India. I applied for a Residency programme in the US . At the interview , 3 of the Attendings were happy to take me on , but the senior Attending put in a clause that as they did not have a paid post right then, I could work there …as an unpaid trainee ..for a year for them to get to know me etc with no guarantees of getting the residency at the year end , and then I could reapply for the post. The gut feeling told me that I had a very good chance of getting the post, but the facts of a very thin savings account to sustain me for a year + the loss I would incur by wasting a year waiting and not getting it etc got in the way and I did not take it…and the post went to the next chap who agreed to the terms.

    I then retrained as a Primary Care Physician due to family reasons. After completion of training I moonlighted in a few practices and one big practice said they liked my work and skil and offered to take me on as a partner If I was prepared to work there on a lesser pay for a few years. My gut feeling about the place and people was to reject the offer, but the fact that it looked like a nice practice wher I could flourish in my special skills + closeness to home etc made me take it. 5 years down the line, having incurred a loss of 120K dollars and not yet a full partner, I have learnt my lesson and have become wiser.

  2. I think a huge factor in JCP’s crisis was that Mr. Johnson’s changes in marketing strategy were simultaneously accompanied by RIF’s of over 19,000 employee’s. Mr. Johnson’s key executive team was made up of others from Apple who believed and leaked to media outlets that the JCP Headquarters ‘was overstaffed and under worked’.

    So whether it be interpreting scientific data or discussing intuitive innovations, who in their right mind would disagree with the Apple Club. Even if Mr. Johnson would have done a good job of testing his concepts and gathering appropriate customer data no one could use it effectively.

    Hans Christian Andersen, that management guru captured it best in his tale of “The Emperor’s New Clothes”.

  3. Thank you for these thoughtful responses. Interesting commentary – and certainly JCPenney will be an Harvard case study, at some point. Thank you, Murali, for joining our distribution and sharing your thoughts!!

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