Principle 7 - Factual approach to decision making

Effective decisions are based on the analysis of data and information. 

Benefits:

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  Informed decisions.


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  An increased ability to demonstrate the effectiveness of past decisions through reference to factual records.


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  Increased ability to review, challenge and change opinions and decisions. 

Application:

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  Ensuring that data and information are sufficiently accurate and reliable.


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  Making data easily accessible to those who need it.


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  Analyzing data and information using valid methods.


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  Making decisions and taking action based on factual analysis, balanced with experience and intuition.

Though principle requires factual approach to decision making, you can not get away with intuitive and gut feeling approach while making certain decisions. Factual approach precedence when you need to take decisions regarding corrective action after a reported nonconformity and preventive actions after a potential nonconformity is envisaged. Intuitive, gut feeling and confidence takes precedence in cases where risk is involved (remember basic economics says without more risk, more gain), take following example:

Before the launch of "Kinetic Honda" scooter in India, Kinetic did a survey to know customers' perception on gearless scooter. At that time "Kinetic Luna" was very famous and it had problems when drive up hill or on an over bridge. People responded negatively. Still "Kinetic Honda" scooter was launched. It was not a runaway success, but company organized customer awareness programs, street shows, test drives and even its skilled engineers showed customers how to drive a gearless scooter. Eventually it was a success.

During the same time LML Limited (previously Lohiya Machines Limited) also planned to launch a gearless scooter, they also received negative feedback when they conducted the survey and decided not to launch a gearless scooter in India.

There is another very famous example from text books. Two different shoe manufacturing companies deputed their representative in a remote area to study the possibility of selling shoes there.
Upon visiting the area, both found that no-one wears shoes or chapels here. One reported that there is no scope for selling shoes here as no one wears them, other called back and said send entire stock as no one wears shoes here.