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?