The UK country report that accompanies the global report highlights that UK business leaders have seen major improvements in the quality of big decision making over the past two years, especially among highly data-driven companies. However, data and analysis are only the third most important input into the decision making process for UK business leaders. Own experience and intuition, as well as the advice and experience of others internally, remain the main inputs into the decision making process at UK companies, and more so than in the rest of western Europe and globally.

1. UK country report – Capitalising on
the art & science in decision making:
Exploring the agenda for big decisions in
2014-15 and the process that UK business
leaders will go through in making these
decisions.
Gut &
gigabytes
www.pwc.co.uk/data-analytics
Written by
Intelligence
Unit

2. Gut & gigabytes
PwC Foreword
PwC Foreword:
Intuition in the machine-to-
machine age
Tom Lewis
PwC UK Data and Analytics Lead
E: tom.e.lewis@uk.pwc.com
Yann Bonduelle
PwC Data and Analytics Consulting
E: yann.bonduelle@uk.pwc.com
Tom Lewis
Upgrading the art and science of
decision making
Extracting insight from an organisation’s data and
applying it to business decisions has long been a
necessary business skill. But in the last few years,
data analytics is appearing more and more as a top
priority issue, perceived as critical to unlocking
future growth, managing cost and decreasing risk.
We know our clients were increasingly using
data in operational decision making – often using
automated processes that respond in real time
without human interaction. But we were interested
to understand better how data and analytics
is being used in the boardroom, to make those
bigger strategic decisions that determine the future
of organisations.
We wanted to understand what decisions were
being made, how they were being made and
how often – specifically including the relative
importance of data and analytics, and business
‘gut instinct’.
We are excited to share our findings for the
UK – placed in the context of our larger global
survey results.
Its interesting to observe that UK organisations
rate their data and analytics’ capabilities highly in
a global context, believing that quality, quantity
and reliability of the data they have is good and
improving. And yet, the UK senior stakeholders are
less likely than their colleagues elsewhere to use
data and analytics as the main driver of strategic
decisions. More than half remembered a bad
experience where reliance on data analytics had
been detrimental to their businesses in the past. It
seems we are investing in sound data and analytics,
but still rely upon intuition and experience to
determine the big bets in business.
In many ways, this result is not a surprise. Good
business is both art and science – rational and
intuitive. The role of data and analytics is to
improve decision making by making the rational
element as well-informed and insightful as
possible to reduce business risk. It works alongside
experience and intuition, but not to replace it.
Yann Bonduelle

3. Capitalising on the art & science in decision making

4. Gut & gigabytes

5. Contents
About the report ....................................................................................1
Executive summary ...............................................................................3
Decision time – Big decisions are on business leaders’ agendas in
the next 12 months ................................................................................5
Augmented reality – Data and analysis can enhance
experience and intuition ........................................................................9
Conclusion.......................................................................................... 13
PwC contacts....................................................................................... 14
Capitalising on the art & science in decision making

6. About the report
Gut & gigabytes: Capitalising on the art & science in decision making.
Explores the agenda for big decisions in 2014 – 15 and the process that
business leaders will go through in making these decisions.
The report is published by PwC and written by The Economist
Intelligence Unit (EIU), with the exception of the separately
labelled boxes which are written by PwC. The views
expressed by the EIU do not necessarily reflect those of PwC.
Definitions
We have used the following definitions for this report.
Big decisions: the most significant decisions about the
strategic direction of the business (ie not concerned with day-to-
day operations).
Big data: the recent wave of electronic information produced
in greater volume by a growing number of sources (ie not just
data collected by a particular organisation in the course of
normal business).
Data analysis: the use of analytical techniques to generate
new insights from data.
1 Gut & gigabytes
A note on sample size
In May 2014 the EIU surveyed 1,135 senior executives,
over half (54%) of whom are C-level executives or
board members. This sample also included 50 senior
representatives from government and the public
sector. Respondents came from across the world and
represented 18 different industries. The majority of
companies (74%) reported an annual revenue last year
of at least US$1bn, and no company had annual revenue
below US$250m. The ownership of companies in the
sample is evenly split between publicly listed companies
and private, family-owned or state-owned enterprises.
In the context of our global survey, the sample size of
UK respondents, at 75, is relatively small. There is, as
a result, a greater qualitative influence in this report
compared with the global insights, especially when
examining correlations between survey questions.

7. 44% 54%
22% 22%
18% 19%
$ 52% $ 40% $ 43%
49% 37%
35%
Capitalising on the art & science in decision making 2
Figure 1
Demographics of the global survey
UK Western Europe Global
Sample size 75 289 1,135
C-suite respondents
Function Operations and production Marketing and sales General management
Marketing and sales Strategy and business development Operations and production
Finance Operations and production Strategy and business development
Size of organisation
(annual global revenue)
US$1bn-5bn US$1bn-5bn US$1bn-5bn
Geographical reach of
organisation
Multinational Global Global
Global Multinational Multinational
Publicly listed
Location
28%
UK: 100% UK: 26% North America: 35%
Germany: 26% Western Europe: 25%
Netherlands: 11% Asia Pacific: 24%
Spain: 11% Rest of world: 16%
France: 10%
Italy: 5%
Rest of western Europe: 11%
44%
35%
25% 20% 21%
20%
51%
29%
65% 62%
49%

8. Executive summary
This profile of big decision making in Britain looks at the changing nature of the typical big decision
in the UK, what motivates it and how it is made. The key findings include:
Growth is top of the agenda,
but cost pressures drive UK
businesses to collaborate with
competitors.
Growing the business is regarded
by senior executives in the UK as
the single most important area for
big decisions in the year ahead.
However, because costs and margin
pressure are identified as the
main strategic motivations for big
decisions, executives are looking for
more creative ways to build their
business without a large monetary
investment. More than half of
respondents (52%) expect to make big
decisions in the next year that involve
competitive collaboration, making
this a much stronger trend in the UK
than elsewhere.
3 Gut & gigabytes
The quality of big decision
making is improving.
British business leaders are more likely
to report an improvement in the quality
of decision making in the past two
years than the global average, with
83% reporting an improvement and a
third (32%) a significant one. Highly
data-driven companies are more likely
to report improvements in big
decision making.
Experience and intuition are the
main inputs into the big decision
making process.
Although all aspects of data and data
analysis are rated highly in the UK,
data and analysis are only the third
most important input into the decision
making process, after own experience/
intuition and advice/experience of
others internally.
Concerns about data quality and
overload are the main barriers to
the greater use of data.
Despite the generally positive attitude
towards data and analysis, many UK
business leaders remain concerned
about data quality, alongside data
overload. Moreover, more than half
of UK respondents (61%) feel that
“relying on data analysis has been
detrimental to our business in the
past”. By contrast, there are few
concerns about sufficient talent or
skills to make the most of the data that
organisations collect.
More people are involved in
big decision making at UK
organisations than before.
The rise in more democratic decision
making is not unrelated to the rise
in the availability of data, which has
encouraged a kind of evidence-driven,
and more democratic, approach to
big decisions.

9. Big decision-making is changing
Capitalising on the art & science in decision making 4

10. Decision time
Big decisions are on business leaders’
agendas in the next 12 months
As the UK economy has accelerated into 2014, growth has returned to the top of the agenda. For the
senior executives surveyed for this report, the most important big decision in the next 12 months
will concern growing the business (see Figure 2).
Yet, it is not a straightforward picture.
Cost and margin pressure, as well
as structure of industry, are the top
strategic motivations for the most
important big decisions by UK business
leaders, well above profitability and
revenue. Indeed, only 13% of UK
respondents cite profit and revenue
as the primary motivation for their
most important big decision. This is
a considerably smaller share than in
western Europe (33%), the US (30%),
China (37%) and Japan (38%). In
addition to cost/margin pressure and
structure of industry, UK respondents
are more likely to be swayed by
regulatory or legal issues.
5 Gut & gigabytes
PwC perspective
A majority of the clients we spoke to about
strategic decision-making were making decisions
motivated by a balance of growth and cost and
margin pressures. We spoke to manufacturers, for
example, that were making decisions on where to
focus sales and marketing efforts globally, driven
by top-line revenue growth – but equally decisions
on the location of production facilities were often
influenced by cost factors, to ensure this growth
was profitable.

11. Capitalising on the art & science in decision making 6
Figure 2
The big decisions agenda: Most important decisions
“In which of the following areas do you expect to make the most important big decision in the next year?
Select the one most important decision you expect.”
Growing
existing
business
Entering new
industry or
starting new
business
Shrinking
existing
business
Collaborating
with competitors
1
2
3
4
Major
investment in
the business
££
5
Source: Economist Intelligence Unit survey, May 2014
Western UK
Europe
Global
18% 21% 24%
12% 13% 21%
14% 9% 17%
15% 11% 12%
7% 10% 8%

12. When you can’t beat them…
This ongoing commitment to cost
discipline also explains the willingness
of UK executives to seek partnerships
with other companies as a way of
sharing the expense of investing for
growth. Growth may be the top priority
over the next 12 months, but the
most common big decision on the UK
corporate agenda is to collaborate with
competitors (see Figure 3). A bare
majority (52%) of UK respondents
expect to make a decision in this area,
16 percentage points higher than the
global average.
As the global survey indicates, for the
pharmaceutical and healthcare sectors
– prominent industries in the UK – such
collaboration is the top priority. Patrick
Vallance, president of pharmaceutical
R&D at GlaxoSmithKline, recognises
this strategic trend. “Organisations
must form new partnerships and new
approaches with a new mind-set – one
which is more innovative, flexible and
willing to take risks,” says Mr Vallance.
“In recent years this approach has
become fundamental to the way we
research and develop new medicines,
and we have more collaborations now
than ever before.”
7 Gut & gigabytes
Other industries are forming strategic
partnerships, too. Sainsbury’s, one of
the UK’s “big four” supermarkets, has
fought back against the rise of discount
stores such as Germany’s Aldi and Lidl,
which are increasingly cutting into its
business, with a collaborative effort.
Unlike Morrisons and Tesco, which
have responded with aggressive price-cutting
to compete, Sainsbury’s has
teamed up with Dansk Supermarked,
Denmark’s largest retailer, taking a
half-share in the low-cost Netto chain
of supermarkets and opening 15 stores
in the UK. Sainsbury’s can take a
slice of the low-cost opportunity by
leveraging its extensive distribution
network without diluting its
premium brand.
However, working with competitors
can be difficult, according to
Martin Glenn, CEO of United
Biscuits. “Every company needs an
enemy,” he says, but collaboration
can nonetheless be successful and
lucrative for all. “It often works best
when it is collaboration to benefit the
overall industry.” Mr Glenn points to
collaborative work on voluntary food
labelling as a good example of such
efforts in the food industry.

13. 2 33% 42% 43%
3 34% 41% 36%
4 30% 35% 36%
5 30% 25% 29%
Capitalising on the art & science in decision making 8
Figure 3
The big decisions agenda: Most common decisions
“In which of the following areas do you expect to make big decisions in the next year? Select all that apply.”
Source: Economist Intelligence Unit survey, May 2014
Western UK
Europe
Global
Growing
existing
business
Entering new
industry or
starting new
business
Shrinking
existing
business
36% 43% 52%
Collaborating
with competitors
1
Corporate
restructuring

14. Augmented reality
Data and analysis can enhance
experience and intuition
Over the past two years a considerable majority of senior executives in the UK (83%) have noted
an improvement in big decision making. More than the global average, the improvement has been
“significant” for around a third. What has changed?
For some, the nature of decision
making in UK business is changing.
“Decision making has been better
enabled by recent improvements
in technology that supports idea-sharing
9 Gut & gigabytes
and co-creation of innovative
solutions,” says Mr Glenn.
Another variable is the role of data.
For 40% of UK respondents, the use of
internal and external data is the aspect
that has changed the most in the past
two years. Moreover, highly data-driven
UK companies are more likely
to report a significant improvement in
their decision making in that time –
and more so than their counterparts in
western Europe.
Testing outcomes is one of the
biggest benefits of big data, according
to Richard Reeves, head of strategy
at EE, the UK’s largest mobile
network operator. “What we have
now within industry is the ability to
test hypotheses much more quickly,
and validate the way forward much
more quickly than we ever could
before,” says Mr Reeves. The upshot
is quicker decisions, better decisions,
and typically more confidence in
those decisions.
All aspects of data and data analysis
as far as their use as a tool for decision
making is concerned are rated highly
among UK respondents, with more
than three-quarters giving a rating of 4
or 5 on a 5-point scale (where 1 is poor
and 5 is excellent) – well above the
global and west European averages.
Sentiment is similarly positive about
the underlying quality – rating the
sufficiency, timeliness and reliability
of data used at their organisation
relatively highly, as well as aspects of
data analysis, including the ability to
visualise the data and the quality of the
insights derived.
PwC perspective
Of the clients interviewed by PwC, a
majority were making an increasing use
of data and analytics. “We are making
considerable investments in planning and
analytics tools, reflecting the importance of
data – especially external market data – to
planning in our business,” commented Ryan
Mangold at Taylor-Wimpey. At Channel 4,
analytics is being used increasingly to influence
a range of decisions including “programme
commissioning, scheduling and the optimisation
of advertising revenues”.

15. Capitalising on the art & science in decision making 10
Figure 4
The big decision making process
Which of the following inputs did you place the most reliance on for your last big decision?
% of respondents
Own intuition or
experience
Advice or
experience of
others internally
Data and
analysis
(internal or
external)
Financial
indicators
1
2
3
4
Other
5
Source: Economist Intelligence Unit survey, May 2014
Western UK
Europe
Global
30% 38% 41%
28% 22% 31%
30% 28% 23%
9% 5% 5%
4% 6%
For now, though, this confidence in
data and analysis among UK executives
has not translated into them relying
on these tools as primary inputs in
the big decision making process. In
fact, a combination of experience and
intuition is the most important input in
the decision making process (for 41%
of respondents), ahead of the advice or
experience of others internally (31%)
and data and analysis (23%). This is
more so than in the rest of western
Europe and globally.
PwC perspective
The CEO of Xchanging, Ken Lever, characterised this balance
between data and business judgement as an inverse relationship
between risk and time. “Incremental data collection and analysis,
in general, reduces risk, but with diminishing returns over time,” he
explained. “Business judgement is needed to decide when the point of
diminishing returns has been reached….when incremental analysis
will slow down decision making and add to, rather than reduce risk.”
Jeremy Vincent of Jaguar Land Rover agreed. “There is a threshold
beyond which continuing to develop and optimise will achieve
relatively little. There comes a point when a decision needs to be
made and the business turns to implementation.”

16. A healthy dose of scepticism
At first glance, this survey result
appears contradictory. Data and
analysis only come third as an input
in the big decision making process
at UK companies, although – as
mentioned above – increased use of
data and data analysis is associated
with improvements in big decision
making, and all aspects of data and
analysis are rated relatively highly by
UK business leaders. But our suvey also
shows that a healthy dose of British
scepticism remains with regard to the
use of data and data analysis. Indeed,
the share of British business executives
agreeing with the statement that “data
analysis is undermining the credibility
of intuition or experience” (59%) is
10 percentage points higher than the
global average and 24 percentage
points higher than the west European
average. A similarly high percentage
of UK respondents (61%) feel that
“relying on data analysis has been
detrimental to our business in the
past”; again, a much higher share
than in other west European countries
(34%) and globally (46%).
11 Gut & gigabytes
Some of this scepticism may be rooted
in remaining concerns about data
quality – despite the above-mentioned
generally positive attitude towards
data and data analysis. The quality,
accuracy and completeness of data
are seen as one of the biggest barriers
preventing UK companies from making
greater use of data and data analysis
when making big decisions (41% of
respondents). Moreover, when asked
about the aspects of the big decision
making process that have changed the
most in the last two years and those
that need to change the most in the
next two years, UK business leaders
say that the quality of data analysis has
changed little in the past, but a fifth
(19%) feel it needs to.
Another major barrier to using data
for decision making in the UK is the
difficulty of assessing which data are
truly useful (the same percentage as
those who mention data quality). There
is a temptation with large amounts of
data to dive in and look for patterns
and let that dictate the agenda. But it is
easy to get lost without, first, a guide,
and second, a reason for diving in.
Better, according to Mr Reeves, to start
with a question and then use the data
to answer it. “It’s got to be a solution-centric
approach,” he says. “You
can’t automatically just throw huge
amounts of data at people, you have
to understand what it is that you’re
hoping to achieve.” And that takes
experience, intuition and knowledge.
Hence, the ability to use data in the
decision making process has become
an important factor in decision making
at senior management level: 81% of
UK respondents agree that familiarity
with data-driven decision making is a
prerequisite for senior management.
PwC perspective
PwC clients mention a range of factors holding
back an even more widespread adoption of data
and analytics in their businesses. Some cited
structural factors in their industry – “House
building is a traditional industry with reluctance
in some areas for new ways of thinking,”
commented Ryan Mangold of Taylor Wimpey.
Other newer industries can be similarly bound by
precedent and a realisation that analytics cannot
answer all questions “Analytics of individual
customer viewing behaviour is transforming our
business – but the industry isn’t used to thinking
in this way quite yet – and certain decisions in the
TV industry must always be made using intuition
and creative judgement,” commented Sanjeevan
Bala of Channel 4.

17. Capitalising on the art & science in decision making 12
PwC perspective
Some of our clients are finding ways to avoid
skills’ shortages, “including partnering with
local universities to attract and train talent,”
commented Sanjeevan of Channel 4. Others are
preparing themselves for these challenges to
come. “We are not yet hitting skills constraints,
but expect to do so as we develop more
transformatory plans in data and analytics,”
commented Chris Day of the Post Office.
In PwC’s experience, while technical data science
skills’ shortages can be overcome in the short-term,
the more pressing constraint is finding
senior business leaders that span commercial,
analytics and technology, that can champion and
drive major transformations in the use of data and
analytics in driving C-suite decision making.
However, lack of talent and skills
does not seem to be a major barrier
preventing UK companies from
making greater use of data and data
analysis when making big decisions.
An overwhelming majority of UK
corporate leaders (87%) believe that
their organisation has a sufficient
pipeline of talent to analyse the data
it collects.
A rise in more democratic
decision making
Increased use of data is not the only
reason why business leaders surveyed
cite improvements in decision making.
More people are also involved in
big decision making. This more
democratic approach to decision
making may reflect a growing need for
breadth in experience and expertise
among those involved in the decision
making process, in an uncertain
world characterised by the increasing
interdependence of industries,
disciplines and difficult-to-spot, fast-developing
disruptive trends.
The rise in more democratic decision
making is also not unrelated to the rise
of data. Indeed, data have encouraged
a kind of evidence-driven, and more
democratic, approach to big decisions.
Big decisions at EE, says Mr Reeves, are
made by “a few key decision makers”,
but data does change the dynamic
– allowing decisions to be open to
challenge. “Some insights around
analytics are available to a broad
selection of the EE management team,
and it allows them to come up with
their own hypotheses and challenge
the activity that’s being done.”

18. Conclusion
This report on big decision making in the UK has highlighted a renewed
sense of optimism among British companies. With the UK economy
recovering, the most important big decision for UK senior executives in the
next 12 months will concern growing the business. However, a renewed
focus on growth does not mean UK business leaders are neglecting costs.
Indeed, cost and margin pressures are the key strategic motivation behind
big decisions in the UK, much more so than profitability and revenue.
Cost pressures also drive the most common area of big decisions that UK
senior executives expect to make over the next two years: collaborating
with competitors.
13 Gut & gigabytes
We also looked at the big decision
making process and noted that UK
business leaders have seen major
improvements in the quality of big
decision making, especially among
highly data-driven companies.
However, data and analysis are only
the third most important input into the
decision making process for UK business
leaders. Own experience and intuition,
as well as the advice and experience
of others internally, remain the main
inputs into the decision making process
at UK companies, and more so than in
the rest of western Europe and globally.
Despite the generally positive attitude
towards data and analysis in the UK,
many business leaders are concerned
about data quality and overload. By
contrast, lack of skills or talent to
make use of data is not seen as a major
problem. This is crucial, as the survey
shows that familiarity with data-driven
decision making is deemed a
prerequisite for senior management.
Finally, the rise of data has gone hand in
hand with the rise in more democratic
decision making in the UK and globally.
A kind of evidence-driven, and more
democratic, approach to big decisions
has emerged, allowing decisions to be
open to challenge.
Making the most of data is becoming
increasingly important to senior
executives. It is often said that a rise
in data-driven decision making puts
a certain generation of experienced,
go-by-the-gut decision makers under
threat. Hence it is crucial, says Alan
Gilchrist, a lecturer at Lancaster
University Management School, that
the C-suite responds to the demand
for data-savvy managers, data
scientists and statisticians at the top of
the business.

19. PwC perspective: We have the tools to make the best decisions
Businesses have often accepted “second best” because of lack of information, or believe that
instinct and experience can step in and more than make up the difference. It’s time to challenge that
thinking. Here are four steps to successfully applying data and analytics to strategic decisions.
1 2 3 4
Capitalising on the art & science in decision making 14
Identify the decisions
that matter
Understand the most
important decisions for your
business success – and those
you make most often (they
are often different). Focus
upon the data insights that
can make a difference to
these decisions.
1
Gain C-suite commitment
Ensure all your senior
stakeholders involved in
making these decisions
support and understand
the role that data and
analytics can play.
Underlying resistance
can undermine good
work elsewhere in the
organisation.
Begin small and learn
by doing
Application of data and
analytics can begin with
small examples of new
insight, gained via a
test and learn approach.
Technology is flexible and
modular – using data no
longer requires a 24-month
investment in building an
enterprise data warehouse.
Build confidence
over time
Organisations will use
more data and analytics
once some initial success
has been seen – and
decision making is
perceived to be improving.
Building a case study in
one business unit can
help inspire the wider
organisation.
PwC contacts
Tom Lewis
Uk Data and Analytics Leader
T: +44 (0) 20 7213 5911
E: tom.e.lewis@uk.pwc.com
Yann Bonduelle
Consulting Data and Analytics
T: +44 (0) 20 7804 5935
E: yann.bonduelle@uk.pwc.com

20. www.pwc.co.uk/data-analytics
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