Many family business owners have a romanticised and over positive view about the value of business decisions based on intuition. It is a common occurrence that when I simple ask family business owners on what basis they take their decision, they reply with a smirk on their face that they can rely on their “gut” in order to decide, based on what they believe is right. Sometimes I even see family business owners trying to push some decisions, even when they are confronted with evidence that speaks contrary to their decisions. Many times I feel that the concept of intuition has become so romanticised in modern life that it’s now a part of how people talk about and understand the “ business geniuses” of our generation. In science, for example, Albert Einstein is often quoted as saying, “The intuitive mind is a sacred gift,” and in business, Steve Jobs is quoted as saying, “Have the courage to follow your heart and intuition; they somehow already know what you want to become.” This could all hold some truth, however experience has taught me that it would be a big mistake to base all business decisions around a mere gut feeling.

While intuition can provide a hunch or spark that starts you down a particular path, it’s through data that you verify, understand, and quantify. Research clearly indicates that highly data-driven organisations are three times more likely to report significant improvements in decision-making compared to those who rely less on data.

Data-driven decision-making is the process of utilizing your business insights—data, reports, trends, and facts—to make strategic business decisions. Businesses are constantly gathering valuable information on a daily basis that can be used to develop strategies that allow them to reach their goals faster with fewer setbacks, and remain agile in a forever-changing market. By harnessing insights from inside the business, decision-making becomes less of a guessing game and more of a strategic move. However data-driven decision-making is more than just analysing data. It’s empowering business owners and their teams to use the information already within the business to make decisions about everyday work, and weekly, monthly and yearly goals. In return, data-driven decision-making can help improve cash flow, reduce unnecessary costs and keep you ahead of the market.

Making business decisions is one of the most important aspects of being a business owner. Without even realising it, many business owners are making business decisions that can either propel the business forward in the right direction or set them back. Without the proper data to support business decision-making, it can feel like a shot in the dark resulting in a missed target.

Data-driven decision-making can be implemented throughout a business, regardless of its size. However, as a business grows, data strategies become more important in order to keep business functions aligned. From finance and sales to human resources, all departments can benefit from this approach that saves time and money. When real-time data from inside the business itself is being used to make decisions, the guessing game shifts to a well-informed decision.

Implementing data-driven decision-making in your business requires discipline and commitment. First of all it requires documenting all your present processes. This documentation will likely indicate the inadequacy of various of your internal processes and how these need to be changed. Once that is achieved it is a matter of identifying the right technological system to generate efficiency and capture data to have it reported in a meaningful way.

Are family businesses ready to make the shift from the guessing-game approach to a well-informed process? The latest family business survey indicates that 64% of family businesses DO NOT take their decisions based on research and data. More research results on family business decision making will be revealed during the next Family Business Conference to be held on the 23rd May, at the Malta Chamber in Valletta. Click HERE to register for this conference. It will be insightful and worth your time as a family business owner and leader.