Having access to business data allows for better management decisions, but does not guarantee it. Indeed, it is possible to have too much of a good thing, and an over-reliance on data can lead to damaging mismanagement.
In this episode of the Profit Levers podcast, shared with Management Today, MIT senior lecturer Jonathan Byrnes explores three ways having too much data - specifically big data - can result in poor decisions when it’s not used properly:
Brynes relates an observation by PW Singer about the effect of drones providing real-time video footage to senior commanders, which has "rapidly increased the centralisation of command and lead to an explosion of micromanagement", to the detriment of both tactical (battlefield commanders have insights that you can’t get from 5,000ft) and strategic decisions (senior commanders should be focusing on the big picture instead).
2. Analysis paralysis
Data insights can theoretically allow all business processes to be optimised, but a deluge of data can create too many options, clouding the clear vision of the leader and preventing the most important decisions from being made. "If the availability of big data encourages a massive flock of independent tactical initiatives, it will do more harm than good," says Byrnes.
3. "Paving over cowpaths"
Because data insights allow existing processes to be optimised through incremental improvement, they can also make it harder to see when an entirely new solution is required. Byrnes relates it to the old cow paths in Boston, which were paved over to become roads because that was easier than building new roads in the optimal places. The risk is "further entrenching existing practices, rendering the possibility of developing sweeping paradigm-changing initiatives more and more difficult".
Click the image below to visit the Profit Levers site and listen to the full podcast:
Main image credit: Enot Poloskun
Profit Levers credit: Jonathan Byrnes