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Data versus Intuition: A lesson from Groupon's former CEO

Written by Patrice Francois | Mar 6, 2013 9:09:14 AM

Since Andrew Mason announced his departure from Groupon last week, his disarmingly honest 'resignation' letter has been torn apart and dissected. His carefully crafted letter belies the common media perception of him as inexperienced and naive. But for many people it reflects the sort of guy that Mason has come to represent, a likeable, unassuming 32 year old who just happened to hold the reigns of a multi-billion dollar company. His admission of failure tinged with self-deprecating humour is exactly the kind of self-awareness and humility that would be a strength in any leader. Unfortunately, these admirable qualities were not enough to withstand Groupon’s disastrous fourth quarter earnings report. Here’s how he explains the dramatic turn of events:

People of Groupon,

After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today. If you’re wondering why… you haven’t been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable. 

My interest in his resignation letter was further piqued in the closing paragraph when he alludes to one of his biggest regrets at the company. He writes about letting ‘a lack of data’ override his intuition:

If there's one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what's best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness – don't waste the opportunity!

For market research professionals and intelligence analysts whose job it is to unearth this kind of data and make sure it gets into the hands of decision makers, there’s a sad irony here. The familiar narrative is that we’re drowning in a sea of data and yet businesses, including Groupon, are still struggling to convert data into consumer insight. Is it acceptable for a CEO, in charge of steering a publicly traded company, to run with ideas based on a simple hunch or intuition? Only a few brilliant minds can pull it off, Steve Jobs, being the most notable one. That aside, I think it’s a mistake to pit the two against one another. Intuition is a powerful tool and can greatly enhance decision-making, but intuition without knowledge or insight is hugely risky.

Mason regrets not listening to his gut instincts but he also reveals a common passion among business leaders. According to the IBM Global CEO Study 2012, CEOs are prioritizing customer insights far above other decision areas. Andrew Mason might regret going against his intuition but he brings another important issue to the fore - the absence of precise data to guide him in his decision-making. In order to navigate a company successfully a business leader cannot just rely on a strong gut feeling. CEOs need to put in place the resources and capabilities to collect and access useful data and insights leading to better decision making now and into the future. What do you think? Is data or intuition king?

Read the full text of his farewell letter on The Guardian. 

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