Is the lack of evidence-based decision-making impacting Australian businesses?

Samuel TanAPAC Data Journalist / B2B Content Manager
December 15, 2022, 9:06 AM GMT+0

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 – this article – 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, 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.

How does the perceived level of evidence-based decision-making in an organisation correlate with the perceived quality of decisions made?

Latest research by YouGov reveals that three-quarters of senior business leaders who say their organisation encourages and supports evidence-based decision-making rate the quality of their organisation’s decisions as very good (75%).

In comparison, decision quality ratings by senior business leaders in organisations where evidence-based decision-making is only used some of the time, and where most business decisions are made using ‘gut feel’, intuition or instinct is significantly lower – 24% and 46% respectively.

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 do business leaders’ perceptions of evidence-based decision-making vary by organisation size?

Senior business leaders from larger corporations are more likely than those from smaller companies to say that their business encourages and supports evidence-based decision-making.

While more than two-thirds (68-70%) of senior business leaders from companies with 20 or more employees think their organisation is committed to evidence-based decision-making, fewer than half (45%) of senior business leaders from companies with less than 20 employees think so.

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 do business leaders’ perception of evidence-based decision-making vary across management level?

Among senior business leaders, those from the C-suite are significantly more likely than senior frontline managers to believe their organisation is fully committed to evidence-based decision-making.

While more than two in three company chairpersons, chief executives and managing directors say their business is fully committed to evidence-based decision-making (68%), less than half of company directors and senior managers do (44%).

Correspondingly, half of directors and senior managers say there is only some use of evidence-based decision-making in their organisation and many decisions are still made using ‘gut feeling’ and instinct (50%), whereas fewer than a quarter of chairpersons, chief executives and managing directors thought so (23%).

Meanwhile, perception of evidence-based decision-making among business owners, proprietors and partners lies midway between C-suite executives and senior frontline managers. Over half believe their organisation fully embraces evidence-based decision-making (56%), but over a third say many business decisions are still made using ‘gut feeling’ and instinct (36%).

In conclusion, the vast majority of senior business leaders in Australia appreciate the importance of evidence-based decision-making. However, building an organisational culture that supports this is a key challenge for many businesses, particularly smaller ones. Larger businesses should also look to resolve any discrepancies in the perceived level of evidence-based decision-making in the organisation between the C-suite executives and frontline managers.

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:

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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.