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Data vs. Gut – How do businesses think!
In the 60’s, when Pizza Hut and Dominos entered the pizzeria business, their decisions to expand their business relied pretty much on how much they were making each day. When Tom Monaghan, the founder of Dominos, realised that they can earn even up to $3,000 in a single night through a promotion, he knew it was an instant hit. That promotion was Super Sunday way back in Jan 1971. Tom did not need a BI to help him take decisions, he figured this one out himself!
Today, Data Science, BI or Business Intelligence, Machine Learning or even the simplistic phrase, data driven decision making, has all become a norm. Mind you, I am all for it. I strongly believe that businesses should adapt themselves with time which can be a separate topic to be talked about. My own firm encourages businesses to install practices which helps make best use of their data.
The topic for discussion is how do businesses make use of the data and how bold are they to go ahead and take decisions to make them. It is one thing to know what needs to be done but doing what is right or what you think is right, is the real beast! Think of it this way, I can see my belly and I know that I need to lose weight. The obvious answer would be to exercise. Other alternatives would be to change diet or undergo a surgery and remove the extra flab. But how often one finds unable to take any action. That is what I am talking about. Often I notice that even while businesses have all the information they need to take a decision, no matter whatever solution you feel is best, they simply fail to take any action. It is even acceptable if the action plan fails. At least we tried right! But quite often management overlook until the time comes when taking any action is too little too late.
In 2009, Patrick Doyle was informed by the research team that in the taste scores, people rate Dominos much less when they know they are eating Dominos pizza than the blind taste. The information was evident, people think Dominos pizza taste bad. Patrick knew that making changes into their processes and make the pizzas taste better is not going to work. People didn’t have problem with the pizzas, it was Dominos that they begin to hate. His decision to run a campaign where Dominos openly accepted that their pizzas taste bad was one of the boldest moves ever taken by a CEO. It worked dividends as sales went up by 14%.
The results of a taste scores can be captured much accurately and presented in far fancy looking reports than it was back then, thanks to all the latest tools that are there at disposable. The question however that arises is, would any intelligence have come up with the idea to deal with the problem in the way Patrick and his team did. And more importantly, as a business, would you have the guts to take such a decision? Just to give you a sense of how detrimental this could have been, a food consumer is stating that their pizzas, their core product taste bad, they even had consumers state that their ‘crust taste like cardboard’! You never step into a restaurant where the person at the door says, “We know our food taste bad but thank you for dining with us”. That was simply guts based on which businesses have been working since time.
As I have said before, data is important and we at Ima Solution strongly encourage it. Dominos needed the data to know how consumers feel about them. The key takeaway is act upon the information that you have, no matter what the result may be. If you still living under the rock and don’t use data, start using it now! If you do, then sit with your team and act on the information that you have collected. Because without that, you might be just sitting on a pile of gold, unaware!