Commentary

The Case For Not Being A Data-Driven Organization

Data can be a source of great truth for brands, surfacing insights from a wide range of sources and helping inform actions. 

It’s tempting for companies to adopt the philosophy of being “data-driven,” insisting on all decisions being supported only by data and analysis. 

Here are some reasons why this may not be a good idea. 

Bad data leads to bad decision-making. Any analysis or insight is only as good as the data it is based on. There are any number of ways in which data could be compromised. The process for collecting the data could have been biased. It may be inaccurate in the way it was measured, or the sample size was too small to obtain a true picture of what is being measured. 

A good analyst will recognize potential issues and steer management away from making decisions based on poor information. But strictly data-driven organizations may ignore red flags, insisting poor data is better than no data.

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The analysis can be bad. Even good analysts can have a bad day. If the wrong tool is used, or the right one not available, data interpretation can be skewed. A novice can fall prey to common fallacies such as interpreting correlation for causation, or failing to spot false positives. Organizations focused more on outcomes and less on process could fail in their ability to accurately interpret their data.

The data may not exist. There are many reasons for a lack of data. Changing systems frequently results in historical data being lost. Measurement mechanisms may not be in place to collect data on a certain topic. 

Commonly, data might be used to try and describe scenarios that have never existed in the past, since the available data does not cover a situation of interest that is being predicted, and the prediction methodologies being employed are not sufficient to fill the gap. 

A better approach is for brands to be “data-informed.” Brands should recognize the importance of data, collect as much as they can, invest in its quality and in good analysts. They should surface insights from it and bring it to the decision-makers in the organization. 

Data should be used as a piece of the puzzle when making decisions — but it also needs to be combined with experience, intuition, judgement and qualitative research (including interviews and case studies). 

The best decisions and actions are based on a combination of all of these factors. In some instances, the data will be core to the action being taken. In others, it will be ignored completely. Most often, it will be an important ingredient of the decision-making process, but not the only one.

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