Data vs. Gut

Product managers and marketers have to make a lot of decisions - that is a key part of the job. As budding general managers, you are expected to be able to make decisions, and to actually make those decisions - quickly, decisively, and with staying power. Don't make a decision quickly if you don't have to (don't be rash - use the time available) but the world moves pretty fast, and sometime you will only have days, hours or minutes in which to make an important choice.

How you make decisions - the process you use to make an important choice - is a crucial measure of any PM&M person. There are many dimensions to this (maybe I will write about others in another post) but the single area in which I have seen the most mistakes made by otherwise very smart people has to do with how you use data vs. gut instinct when making a decision.

Many tactical and strategic blunders can be traced to errors in this thought process - which means either not using enough data, or over-relying on data. (Like a lot of issues in PM&M, this is a matter of balance and hard to draw a sharp line - how much is too much?)

Error #1 - not using enough data. There is a type of person who likes to make choices based on conceptual or qualitative criteria rather than numbers. In PM&M, that person is often someone who has had long experience in the field or domain of the product and therefore can make "expert" decisions.

That is not a bad thing in and of itself - experience and expertise is important - but anytime you make a decision without data, you are in effect saying that you (the decision-maker) are representative of the market, and that your decision is an accurate proxy for what thousands or millions of other people would decide if they were faced with the same choice. How often will that be true? Are you willing to bet millions of dollars and your job on that hypothesis?

Sometimes it is true - retailers hire merchanidisers who are a demographic match for target customers, so products and styles one likes would usually appeal to the other. But more often, it is not true - irrelevant personal preferences have a way of working their way into the decision, and whatever expertise you gained being an outside expert in your field started to "rust" as soon as you went to work for a product company.

Having a job that allows you to make important decisions is gratifying, but if you make decisions without data when data is available, you are probably guilty of either recklessness or outright ego gratification - both of which are career suicide, since general managers are expected to have sober judgment and to solve for the company's success rather than any personal agenda.

Using whatever data are available is a very good way to make sure your instincts aren't dead wrong before you spend a lot of money pursuing them. (And if your instincts are spot-on, having data will make it a lot easier to convince others).

... more on this tomorrow ...