Traditionally, the driving forces behind decision making have been the experience and instincts of corporate leaders, but this, unfortunately, is one of the main causes of the statistic that dooms 90% of small businesses and startups to failure. Experience and instincts are valuable, of course, but the numbers confirm that companies that base decisions on data are far more likely to be profitable.

The fact is, in an ever-changing world, customer expectations and behavior also vary over time, while our own individual beliefs and ideas do not. Analyzing cases like Blockbuster Video's refusal to buy Netflix or Yahoo's failure to acquire Google's PageRank algorithm for just $1 million, we note that experience or instincts shouldn't always be trusted, as in both cases , wrong decisions were made because the leaders of these brands - successful and with a proven track record of achievements - guided their strategies based on this.

As an example, UPS dramatically saved operating costs and reduced its energy footprint when it started to use location data and traffic information combined with artificial intelligence (AI) to target its network of delivery trucks. Likewise, retailers, including Amazon and Walmart, use a customer's purchase history to predict, with increasing levels of accuracy, which products they want to buy. All this automatically, without human intervention!

The migration to data-based decisions is a difficult path for companies of any size - which poses a particular challenge for large organizations with deeper values ​​and beliefs - but in the current climate of accelerated technology transition, it represents a decisive factor as to whether a company will make it to the top or be eliminated by more advanced competitors and digital adepts.

Source: Forbes