AI-Enabled Analytics for Business

CHAPTER 8The Role of Analytics in Strategic Decisions

All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.

—Sun Tzu¹

AI and analytics should play a governing role in strategic decisions; but, sadly, executives too often employ gut feelings, refer to a single case example, or simply make a decision up front. Yes, we have all done this, but using our learnings from Chapter 2 in biased decision-making, now is the time to recognize how we trick ourselves or fall prey to our passions or the politics of the moment.

We are human—no getting around that—and with 4.5 billion years of evolution wired into us, we will be hard-pressed to ignore our tendencies. Our biggest driver is gut feel. We simply react to our environment. For example, in the book The Righteous Mind: Why Good People Are Divided by Politics and Religion, by Jonathan Haidt (published by Gildan Media, LLC), there is an elucidating discussion of our decisions on morality, which Haidt describes as an “elephant and rider” where we are the rider. We decide what is moral from an almost unconscious perspective based on many factors (e.g. culture, politics, etc.). We are likened to being a rider on an elephant: only with great effort do we alter its course. However, we perceive that our moral decisions come from our high-and-mighty thoughts driven by fairness and refined by intellect—and we are mistaken!

OK, so we are not the towering moral beings we may perceive ...