Suppose a company wants to mimic the business model of Uber and compete with it in a country. Now, the decision can come from the fascination of managers who regularly use the cab hiring service to come to office. Or, it can be backed by customer data where a large number of people have expressed disappointment with Uber. Similarly, the exit strategy may be an IPO like Uber or acquisition by some other company. This decision again can be influenced by the successes of other IPOs like Amazon or Apple or be data-driven where Uber has performed modestly in the stock exchange. In both scenarios, which way is the right approach to make decisions? Should the managers rely on their fascination and intuition or back every statement with data?
What is data-driven decision making?
As evident, data-driven decision making or DDDM is the practice of basing decisions on hardcore data and facts. Data scientists collect and clean data and present them in a comprehendible form to managers who then use the results to form their decisions. Nothing is left to observation or intuition or gut feelings. Real-life data influence organisational decisions. Statistics show that DDDM has helped enterprises to increase their productivity of making decisions by 4% which has directly led to a profit increase of almost 6%. The 21st-century is naturally the era of data.
The best PGDM colleges in Delhi focus on data-driven decision making not only because it is the need of the hour but also to encourage students from removing biases from their decisions. Historically, managers have always been prone to human biases resulting from their culture and environment which led to ineffective decisions across all sectors. Intuitions are often corrupted by the media. The human mind has a limited capacity that cannot take all possible outcomes into account. But the rise of fast and intelligent machines has helped companies to eliminate this drawback and enable managers to make bias-free decisions.
Data-driven decision making is like proving your intuitions with numbers. If you feel that an Uber-like business can thrive in your country’s market, you can now prove/reject the same with data. Revenue trends, value proposition, market swings and customer growth can all be predicted with data directly collected from Uber and/or Lyft and superimposed on intuitions and experience. The resulting decision is then more likely to be realistic and aligned with the actual market.
How to form the habit of DDDM?
With the necessity of data-driven decision making established, it is now time to explore how you can form the habit of it while still in your B-school. The best PGDM colleges in Delhi NCR will naturally see a flurry of recruiters and be sure that all of them will look for future managers who have an eye for data. To infuse DDDM into your DNA early, employ the following tactics.
- Try to back all your answers with data
Be it college presentations or case study answers, try to collect as much data as possible and place your decisions backed by solid stats. Leave little room for intuition and guesswork and leave the field to research if others are allowing their biases to influence the outcome. Once you start seeing that data analysis is actually challenging intuition, you will become increasingly reliant on data and always look for the same before making decisions.
- Add data analytics to your skill arsenal
Data scientists spend 80% of their entire time in organising and cleaning data. In your job, you might have a full-time executive to do the analytics for you, but you will need a basic understanding to decode and analyse the results currently. The skill of data analytics is to understand which number to consider and which to neglect. A certification or an additional subject in your B-School should build the required knowledge.
- Segregate decisions based on data
Strictly basing all your decisions on data can be counterproductive as well. The number of samples taken defines the accuracy of data analytics and conclusions do become faulty if the sample size is not enough. As PGDM graduates of the modern era, you must also possess the skill to segregate decisions based on data. Inferential and predictive decisions must have space in factual results as both come together to generate proper outcomes.
The EMPI B-school, one of the top institutes in the list of PGDM colleges in Delhi, infuses the skill of data-driven decision making from the word go. Management students learn about decision making as per the modern findings and pick the ability to use data to complement their decisions. EMPI’s curriculum is entrepreneurial. The B-school is all about creating unique managers who can drive the corporate world in the future. Naturally, DDDM entered EMPI early and its students make the simplest decisions based on statistics.