How We're Misusing Data -- And What We Can Do About It

by , Aug 2, 2011, 10:47 AM
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We're living in an industry that's awash with data. But are we using the data in the right way?

One study would indicate that the answer is no. A recent survey of CEOs by The Fournaise Marketing Group, a leading British customer acquisition firm, finds that 70% of chief executives feel that their CMOs' key metrics "hardly relate to or mean anything for the company's P&L." That's a bad sign.

But before you decide CMOs aren't ready for the metrics challenges they face, I'd like to offer an alternative explanation. I'd bet that for every CMO who really doesn't get metrics, five more get metrics perfectly; they just don't understand how to craft a meaningful data conversation.

Let's put things in historical context. Fifteen years ago, everyone in the organization had his or her place. The numbers guy lived close to the ground, and the strategy guy worked at 10,000 feet. But times are changing. To cite one SAP executive's observations  on business intelligence technology: it used be that IT folks "were using these solutions to create reports and dashboards and sharing those with users" across organizations. But now? "Many more end users are wanting to get more hands-on with business intelligence." Data isn't just for data nerds anymore.

That's a tremendously empowering development. But it also means that we're blurring the lines between the management who strategize, and the data folks who report numbers to management. And that can cause problems.

One problem, as Kishore Swaminathan, Global Director of Research at Accenture Technology Labs, writes, is "a managerial tendency to 'over-fit the curve'"--  continuing to seek data to guide decision-making, even after you've gotten all the data you need. Instead of data becoming a guide, it becomes a crutch, and then a hindrance-a slippery slope you're easier to hit when data is easy to come by.

Another problem is micromanagement: managers decide that they know data so well, they'll override expert data opinion on which key performance indicators to track, possibly forcing campaigns the wrong way as a result.

And a third problem is that organizations feel less of a need to translate data from the front lines to the executive suite. And so, to bring the conversation full circle, CEOs and CMOs mistrust each other over specific metrics -- when they should have been leaving the details of metrics out of the picture, and worrying more about overarching strategies that the metrics should guide.

How do we keep data flowing throughout the organization (a good thing), while ensuring that we're not steering smart people away from their key expertise? One place to start is with a simple suggestion from Michael Macri, a marketing sciences officer at Ford Motor Company. Macri suggests that when marketers share data with management, they should share intuitive dashboards, and not just hard numbers. The result is a lot less confusion about the story in the data -- and a much easier time in presenting cases up the chain of command.

That's a point worth expanding more. While we're thinking through how to gather data, we need to spend just as much time working through how the data flows through, and empowers, a whole organization. That means thinking about more than just what data we're gathering -- it also means exploring how best to deliver the information to different people in different roles.

That's an easier task to lay out than it is to perform. It takes very smart designers, very smart coders, very smart usability specialists, and a genuine understanding of business structures. It means knowing who needs what kind of information, for what kind of task -- and how to build the technology and visualizations appropriate for each distinct use. It's no kind of job for the weak-hearted.

When we get the kind of visualization technology right that I'm thinking of, the possibilities are astounding. They're also completely vital if we're dedicated to getting the full picture -- literally.

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