Given the increasing role of analytics, are HiPPOS going the way of the dinosaur? According to the recent research from Harvard Business Review Analytic Services, the answer is yes and no.
Perhaps you’ve heard of the term HiPPO (Highest Paid Person in the Organization or Highest Paid Person’s Opinion) – often used in context of the classic art of decision making – as in, people often defer to judgment of the HiPPO. Presumably the HiPPO has attained that status for a reason, being a smart, proven entity whose experience and track record bring to bear on the most challenging business dilemmas.
On Mad Men? Sure. But is this the way contemporary organizations are run?
In “The Evolution of Decision Making: How Leading Organizations are Adopting a Data-Driven Culture,” HBR surveyed 646 executives, managers and professionals about the role analytics plays in their decision making. Several of the questions address the balance between using gut instinct vs. data to drive organizational decisions.
But in the end, it’s not so cut-and-dried in the real world:
- 80 percent of respondents rely upon data in their roles and 73 percent claim their areas rely on data to make decisions
EXCEPT When Judgment Rules…
- 84 percent still cite managerial judgment as a factor when making key decisions.
- More than one third of the respondents say their managers rely on judgment to make decisions.
- More than one half of the respondents say there is little to no transparency into how decisions are made.
Several survey respondents were interviewed by HBR and those conversations revealed a hybrid approach. What became clear is that today, decisions are not solely driven by analytics or intuition. It is not either or, but analytics and a combination of judgment, best practices and business rules. And for those who measure, that approach seems to work just fine.
Read more about striking the right balance of analytics and judgment in your organization. And discover how the role analytics plays in decision making continues to evolve. Be sure you’re on the right side of that trend by downloading the full report, “The Evolution of Decision Making” now.