In the past few years, we have seen a huge proliferation of data. With this amount of data being available, the expectation of data driven decision making has peaked as well. However, in my experience, just using data to make decisions is a trap and can lead to some bad decisions.
Availability bias
The first trap is to think that he data that we have is all the data there is. Most of the times, the data we have is the one’s that is easy to collect, store and make sense of. It is not necessarily the most important or the most relevant.
Having a big trove of data also gives us the illusion of us knowing all there is to know. So, every time we are about to make a decision based on the data we have, we are better off asking if the data that we have is the most relevant, reliable and also includes the context in which it was generated. Is there any other qualitative data point that we need to go look for.
Stuck in the Past
Data usually is about what happened. When looked at holistically, it paints a good picture of the past (what happened). It usually is really bad at telling us why it happened, the way it happened.
To understand this why, we need to not only understand the context but also be able to exercise empathy and some imagination.
Understanding the combination of what happened and why it happened can generate interesting insights and ideas. These can then inform our decisions that could potentially influence the behaviour in our favour.
Data as one source of Information
We need to remember that the data is one of the many inputs we take in and consider when making a decision. The more important the decision, the more we need to move away from just using data to make the decision.
Human judgement and an experts intuition are as important if not more than any amount of data. Human imagination and creativity needs to be a part of the decision mix if we want outsized impact.
Avoid averages
Most data points are comprehended as averages. And averages have this tendency to hide any and all extremes. All extreme data points have interesting stories behind them. They have the potential insights that can help us create outsized impact.
All extreme cases are valuable, even if they don’t teach us anything new, the very act of observing them keeps us from getting caught up in averages and thinking that average is all there is.
In conclusion
In conclusion, I think we are better off making decisions being informed by data, among other things, rather than being driven by data. Data can be a part of what we consider when we make our decisions, maybe an important part.
If we require data to back up all our decisions, we may never end up with a creative or an innovative decision. Sometimes, decisions purely backed up by data alone end up creating significant risk and creating blindspots.
