December 15th, 2022, Samuel Tan
Although 93% of senior business leaders in Australia believe evidence-based decision-making is important for business success, 41% say many or most of their company’s decisions are made on ‘gut feel’ or instinct alone – with 81% reporting that their business suffered consequences because of this.
In this three-part article series on the state of evidence-based decision-making in Australia, we unpack the findings of our national survey of over 500 senior business leaders from small, medium and large organisations.
In Part 1, we explore the correlation between business leaders’ perception of their company’s level of evidence-based decision-making and the quality of those decisions. We also look at how evidence-based decision-making varies by organisation size and the management level of respondents.
In Part 2 – this article – we explore the major business costs of not using evidence-based decision-making, and the top benefits business leaders report seeing when it is practiced.
In Part 3, we explore the common challenges faced by businesses in implementing evidence-based decision-making, and the skills business leaders say are most important in surmounting this.
What are the business costs of not practicing evidence-based decision-making?
Latest research by YouGov reveals that 81% of senior business leaders across small, medium and large organisations report negative business consequences from not using evidence-based decision-making. This sentiment is highest among C-suite executives, where more than nine in ten say so (94%), and lowest among leaders of small and medium-sized enterprises, but even then over two in three agree (68%).
Among senior business leaders of small organisations with 1-19 employees, most report financial losses as among the top negative consequences of not using evidence-based decision-making – such as lost revenue for the business (28%), and lower profit margins due to increased costs (24%).
Among senior business leaders of mid-sized organisations with 20-99 employees, most report lackluster consumer and employee support as among the top negative consequences of not using evidence-based decision-making – such as failure of market launched products / services (38%) and low employee engagement levels (37%).
Among senior business leaders of organisations with 100+ employees, most report issues with business agility and employee morale as among the top negative consequences of not using evidence-based decision-making – such as delays caused by having to stop and change course / re-set a business strategy (43%) and low employee engagement levels (41%).
Want a FREE copy of our full report on the state of evidence-based decision-making in Australia and Singapore? Let us know here.
How does evidence-based decision-making help businesses?
Research by YouGov also reveals that 94% of senior business leaders across small, medium and large organisations report benefits from prioritising and supporting evidence-based decision-making. This sentiment is highest among C-suite executives, where almost all say so (99%), and lowest among leaders of small and medium-sized enterprises, but even then almost nine in ten agree (89%).
Among senior business leaders of small organisations with 1-19 employees, most report financial gains and cost savings as among the top benefits of using evidence-based decision-making – such as increased business growth (40%), increased efficiency (38%), and time savings from not having to fix issues caused by poor decisions (37%).
Among senior business leaders of mid-sized to large organisations with 20+ employees, most report improved consumer and employee support as among the top benefits of using evidence-based decision-making – such as increased customer satisfaction (44-47%) and increased employee engagement (40-44%).
In conclusion, most senior business leaders in Australia understand that the cost of not investing in evidence-based decision-making can lead to significant negative consequences for their company, such as: the loss of productivity, unsuccessful product launches, lower profit margins and even having to close down part of a business. Conversely, embracing a data-led approach to business decisions can lead to business growth, better operational efficiency and more satisfied and engaged customers and employees.
Want a FREE copy of our full report on the state of evidence-based decision-making in Australia and Singapore? Let us know here.
Read YouGov’s latest research on the state of evidence-based decision-making in Australia, in our three-part article series:
- Part 1: Is the lack of evidence-based decision-making impacting Australian businesses?
- Part 2: Evidence-based decision-making: surveying the benefits and costs for Australian businesses
- Part 3: Evidence-based decision-making: top barriers and skill requirements for Australian businesses
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Methodology: YouGov RealTime Omnibus provides quick survey results from nationally representative or targeted audiences in multiple markets. This study was conducted online from 30 September to 4 October 2022, with a national sample of 509 senior business leaders from small, medium and large Australian businesses. Respondents included business owners, C-suite executives and senior managers/directors and were sourced from the YouGov panel. Data figures have been weighted by age, gender and region to be representative of all adults residing in Australia (18 years or older) and reflect the latest Australian Bureau of Statistics (ABS) population estimates. Learn more about YouGov RealTime Omnibus.