Intuition and Analytics in Business Decision Making
Tuesday, February 23, 2016 - 9:45am - 10:30am
Karl Kempf (Intel Corporation)
Humans have been making decisions for hundreds of thousands of years. Over those years the decisions have become much more complex and therefore much more difficult. This is especially true in today’s business world where the difference between a good decision and a bad decision can be worth billions of dollars. On the one hand applied mathematicians have developed a variety of powerful tools and techniques to support good decision making. This power has been enabled by the invention and continuous improvement of the digital computer. On the other hand the legacy of hundreds of thousands of years of human decision making before the advent of mathematics and computers is intuition. As most humans faced with decisions recognize, sometimes intuition is helpful and sometimes it is misleading. This talk provides a very rudimentary background on the rise of both intuition and analytics. It then provides quantitative data on the shortcomings of intuitive decision making and the benefits of decision making aided by analytics drawn from 25 years of work directed at improving business decision making at Intel Corporation. Finally it identifies the next frontier in applied mathematics for decision making in business as the beneficial merger of intuition and analytics. A few encouraging examples are explained to quantify the power of analytics guiding intuition and intuition guiding analytics.