Wednesday, August 6, 2014

Emotion Trumps Data – Fortune

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If Fortune magazine declares it then it must be so. My opening line as CEO of Saatchi & Saatchi 17 years ago, in a speech titled Hasta la Vista, Brand, was that emotions are the defining point of decision-making, be it a corporate executive about to make a big call, or a person standing in front of a supermarket shelf. Donald Calne, Canadian neuroscientist, who famously said “reason leads to conclusions; emotion leads to action!” Then came the question “what comes after brands?” Which led to Lovemarks.

A few days ago the Fortune Knowledge Group in association with the global advertising agency gyro launched a fantastic report which validates Calne, Daniel Kahneman and others, Only Human: The Emotional Logic of Business Decisions, which surveyed 720 senior business executives, revealing the undervalued role of emotion in business decisions.

It prefaces: “In the age of Big Data, it is often assumed that the rational and analytical are the primary drivers of business decision making. However, a new study…has found it is just the opposite—while a majority of senior business executives believe that data is an important tool when making business decisions, it is subjective factors such as company culture, values and reputation that truly play the pivotal role.”

Their key findings about the role of emotions in decision-making are:

  • Executives “trust their gut”: A majority (62%) of executives say it is often necessary to rely on gut feelings and soft factors.
  • Strong reputations and cultures win: When choosing a company to do business with, 70% of respondents cite reputation as the most influential factor. Company culture was also a top driver according to 53% of executives surveyed.
  • Analytical insight requires emotional insight: A majority (61%) of executives agree that when making decisions, human insights must precede hard analytics.
  • Positive gains outweigh negative risks: Most executives (68%) say that the ambition, admiration and potential rewards outweigh fear of failure and being blamed for making a bad call.
  • Long-term partnerships are the goal: The long-term gains are worth the short-term financial risks according to 71% of respondents.
Jed Hartman, group publisher worldwide of Time, Fortune and Money, says “Decision makers want to create a relationship that can lead to a successful, long-term partnership. As with any relationship, aspects like values, reputation, trust and emotion come to the forefront.”

“Business decisions are made emotionally and justified rationally,” says Christoph Becker, CEO of gyro. “A side effect of the tsunami of digital content is, too often, there is an utter lack of human relevance. That is why if you truly want to connect with business decision makers, you must make them feel. That is why you must focus on the ‘why’ of your business, the pure idea. The overwhelming desire to connect to this essence has been, and always will be, incredibly powerful.”

You can download an executive summary of the report here.

And for a reprise of the Big Data Big Emotion roustabout, check this op-ed I wrote last October about why logic can’t do without love.

1 comment:

Simon Bell said...

A fantastic read this morning Kevin.It must have been great for you personally to read the report as it also is for the people that have learned and found inspiration from you over the years.