A Q&A with Santa, and Fleet Manager Mrs Claus, of North Pole Inc
Facts vs. intuition. Man vs. machine. Algorithms vs. emotions. Where do you stand on the topic of data versus instinct???How do you find ways to reduce costs, improve safety and satisfy your customers? Do you rely on your instincts or do you make decisions based on data and analytics?
Companies and managers place different values on the role of trusting their instincts versus letting data be the driving force behind their strategic decision-making. In an era of big data, what role does instinct have in business fleet decision-making?
Encouraged by scientific research on intuition, top managers feel increasingly confident that, when faced with complicated choices, they can just trust their gut. But making decisions solely on instinct can get you into a lot of trouble, particularly if you ignore the data that is readily available to you on a daily basis.
The truth is, when we're given the choice of trusting another person's conclusions, our own guesses, or accepting facts based on algorithmically analysed data, most of us tend to trust human instincts more. Natural biases hiding in our decision-making is part of the reason why we're often reluctant to trust computer generated answers if the data has ever been less than perfect, even though our own record is even worse.
Ask yourself this; if you have the data sitting in front of you and for the most part, it's foolproof, why you would not accept it?
People seem to be harder, in a way, on algorithms than they are on people. No algorithm's perfect. Even the really, really good ones aren't perfect. And that little error seems to be a real problem for an algorithm to overcome. The bad assumption, however, is that the human won't keep making errors and the human could even improve, which probably in a lot of contexts isn't true. The human will keep making worse mistakes than the algorithm ever would.
Ironically, though, outside of business, we are more comfortable letting an algorithm make potentially life-changing decisions for us - finding our future husband or wife, for example. Not only do dating sites result in more successful marriages, they do an excellent job matching prospective couples based on their various preferences and tendencies. And of course, all this matching is done by algorithms.
Google is also an algorithm, which now dominates the market to the point where we don't even question it anymore; for many of us, it's our primary avenue of entry into the Internet. The Facebook News Feed is where many of us love to waste our time, and unless your preferences are set show all the activities and updates of all your friends in chronological order, you're viewing a pre-determined selection of items that Facebook's algorithms have chosen just for you. Amazon recommends products for us. Netflix recommends movies for us to watch. And we don't even think twice about that. But those are algorithms telling us what to do, making predictions.
The financial sector has long used algorithms to predict market fluctuations, but they're also being used in the practice of high-frequency stock trading. This form of rapid-fire trading involves algorithms that can make decisions on the order of milliseconds. By contrast, it takes a human at least one full second to both recognise and react to potential danger. Consequently, humans are progressively being left out of the trading loop ??? and an entirely new digital ecology is evolving.
But, with the applicability of algorithms growing quickly, and with so called big data blowing up and more and more people trying to provide algorithms for decision making in all kinds of domains, we need to better understand what is it that helps people get over the hurdle - to be able to get past those biases and have that trust in the data.
For most people, especially for those running a business, it's not normal to do that. It just seems like, whatever the data is, there are situations in which people are just not prepared to give up their belief in their own knowledge. It's a hard hurdle to overcome, particularly if the domain that they are operating in is one where people think that humans have a special insight that machines couldn't understand.
Take GPS navigation, for example. Trust is a big issue, even though the technology is highly accurate and reliable. We don't always trust it not to get us lost and the one time it sends you on a route that takes too long, you'll never forget that. Resistance and mistrust, however, is getting smaller and smaller as we inevitably experience more success than failure.
The introduction of Uber, an app, which allows customers to book and track, taxis, is a case in point. The millions of customers now using the service instead of regular city cabs - the same customers who complained when the service occasionally let them down, find themselves saying things like, "Just trust Uber. Just trust Uber." And they've learned just to trust Uber.
Our trust in algorithms is likely going to grow and grow over the next few decades as companies make more and more apps that do more and more things in our everyday life and we won't even realise. And people won't see them as intrusive as maybe we have seen in the past. But we still want to get them more accepting on a more conscious level as well. Because, if we can't rely on our intuition, but have neither the time nor the mental capacity to carefully analyse all the facets of a complex situation, how in the world can we make smart choices?
That brings us back to the essential conundrum facing today's business fleet manager: How do you analyse more in less time? The answer may lie in the accuracy and accessibility of software generated data. Sophisticated GPS software can supplement and bolster people's decision-making skills and hold enormous potential for helping fleet managers carry out the two key components of decision-making or problem-solving exercises: searching for possible solutions and evaluating those solutions in order to choose the best one or ones. The more complex and fast-changing the situation, the more challenging both search and evaluation become.
By expanding the analytical as well as the intuitive capabilities of the mind, one allows a much faster, a much fuller, and a much more rigorous exploration of the options.
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