Why You Should Forget About Making Data-Driven Decisions

One of the fascinating outcomes of COVID-19 is how much statistics revolve around our lives. It’s not like we never came across statistics but rarely did so many people engage with them daily. For some, COVID-19 cases and vaccinations are triggers for uncertainty and frustration. For others, they are simply becoming white noise.

The constant availability of data has led to people trying to make “data-driven decisions.” What does the data say about risk? What do the numbers tell us about how we should act? The same principle carries over to our work, where executives can refuse to move until “the numbers are in.”

What started a reasonable action — using data to make informed decisions — is quickly becoming a crutch. It’s time to forget about using data to make decisions.

Are You Trying to Read the Tea Leaves?

Data doesn’t always line up with reality, especially when looking towards the future. For example, you simply have to look at nearly every Public Health agency during the pandemic. There was no data on how the pandemic was shifting, yet nearly everyone made the wrong decisions.

Trying to predict the future with data can be like reading tea leaves. You’ll see in the people who analyze wildfires to understand how they will spread. Models will predict that a fire won’t spread shortly before the fire moves in an unexpected direction. 

Airlines have been forced to change profit expectations after a consumer surge in demand didn’t materialize. We shouldn’t even talk about sports teams trying to use “Moneyball” statistics to build the perfect rosters (I’m talking about you, Houston Rockets).

Our world is complex and isn’t always easily organized into lines of code. I get that we want to bring order into chaos, but there are limits to how far data can go. The trouble is that an obsession with data can lead to an overreliance and eventually a complete freeze. I always see it when working with companies, even if they aren’t dealing with issues like wildfires or pandemic uncertainty. 

What Matters is Speed, Boldness, and Flexibility

If you don’t use data to make decisions, what should you do? Throw caution to the wind and flip a coin? While that sounds like an interesting experiment, I deal with the pragmatic in my work with clients. I advocate for speed, boldness, and flexibility.

Speed refers to how quickly you can move. For example, instead of spending 3 months hashing out a 3-year strategy that is outdated after 12 months, aim to spend 1 day creating a 12-month strategy. Repeat the process after your strategy runs out. Companies discover that ideas don’t always require months or years of implementation. You can get started much quicker.

Boldness is your ability to move despite uncertainty. You might not be sure if the pandemic will make your work harder, but you keep moving forward. You can plan actions for different scenarios: more restrictions, fewer restrictions, and no restrictions at all. The ambiguity doesn’t have to force you to wait.

Flexibility is your capacity to change course. I find the hardest thing here is accepting that an initial plan didn’t work. For example, perhaps you wanted to bring everyone back into the office, but the delta variant derailed those plans. Cancel the in-person events and think about planning virtual equivalents. 

Data isn’t bad, but waiting for it can kill you. Don’t get caught up in ideology. Otherwise, you will find yourself wondering how the fire spread to areas that a computer model said were impossible. You were better off looking out the window and wondering what could be possible and how to minimize risk.

One more thing before you go! Do you know how to get more insights out of your data? 

All companies are sitting on a goldmine of data that they haven't fully explored. It's not about technology or capturing more data. The key is to learn how to make the most of your current data and convert it into actionable insights. This is the main idea behind my first book, The Data Miage: Why Companies Fail to Actually Use Their Data

I'm excited to announce the release of the book through all major retailers. If you're interested, you can download the first chapter for free using the form below. You'll learn what the best data-driven companies do differently and how to make sure you're playing the right data game.