There is no shortage of fanfare – and fact-based evidence – surrounding the potential for organizations to exploit the vast amount of data being generated about their customers, products and markets.
But while designing the technical infrastructure needed to effectively gain actionable insight from data analysis can be daunting, overcoming some of the bad habits of managers and those instilled in the organization itself can prove to be more problematic for some companies.
There are six bad habits that can keep companies from becoming data driven, notes Thomas Redman, author of “Data Driven: Profiting from Your Most Important Business Asset,” in a Harvard Business Review blog post.
1. Intuition is valued more than data. Many managers – especially those seasoned in a particular industry – feel they can trust their gut instincts to make decisions.
“Interestingly, I find many managers who behave this way to be solid in most respects – they care about their companies and people,” Redman notes. “But they go to great lengths to ignore, downplay, or subvert any evidence that suggests a better way. Some even re-interpret the data to reinforce their long-held mental models. The near-certain results are processes, operations, and teams that are increasingly out-of-date.”
2. Managers often go to great lengths to justify their own decisions. “The Internet has made it easier – no matter what the opinion, there is always some data to support it,” he says. “People figure out what you’re up to and develop a healthy mistrust pretty quickly. So even when you are right, it becomes much more difficult to gain the support needed to execute your decision.”
3. Information is hoarded. Those who are particularly doubtful about the value of data may withhold potentially useful information and then pounce the moment decision making suffers from a dearth of information.
4. Companies delay decision making. “Analysis-paralysis plagues people and companies that don’t deal well with uncertainty,” according to Redman. “They can fall into the trap of seeking ‘just one more bit of confirmation’ before deciding. They don’t realize that not making a decision is a decision in itself and can have consequences. Delay too long and the competitor may introduce that new product line first; a great candidate may go elsewhere; and an investor may withdraw its offer.”
5. Group-think is part of the culture. Employees who think the same way make decisions together, ignoring data that may point in another direction.
6. Data quality is not well understood. Some employees who use little data believe what they do use is high quality even without the evidence to back that up, Redman adds. Or, they don’t worry about data quality at all because they believe so strongly in intuition (see bad habit #1) that they don’t use the data anyway.
“It is of course, difficult to break multiple bad habits all at once. So if you’re going to pick one to start, stop second-guessing others,” Redman advises. “More specifically, stop withholding and start sharing potentially useful information every chance you get. Doing so pays great dividends in the form of increased trust, better teamwork, and others sharing with you (though don’t expect everyone else to be so forthcoming).”
Next, he advises companies to break the group-think habit, instead asking for colleagues to provide independent, divergent viewpoints.
“Finally, engage your management team in doing exactly the same thing for your organization,” he concludes. “Make a pact with yourselves to call each other out any time you observe the trait. You need to provide true leadership here, as others will follow your example. It’s the only way to advance, and reap the benefits of, a data-driven culture.”
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