Why bigger data isn't better data

EVERYTHING YOU KNOW ABOUT BUSINESS IS WRONG: Having more data will make you a better decision-maker.

by Alastair Dryburgh
Last Updated: 23 Jun 2016

What do you do if your business is falling off a cliff? When customers are staying away in droves, profit is plunging and everything you used to do doesn't work any more? A popular response is to say: 'We need more information,' especially as in the age of Big Data there are infinitely greater amounts of it available. But how much, if at all, can more data inform more effective action?

The attractions are several. First of all, it is a good displacement activity. 'We need more data' is a wonderful way of putting off an uncomfortable decision. It involves doing, rather than thinking. It's easy to look and feel busy while collecting and analysing data. Thinking, on the other hand, can sometimes be confused (by your boss, for example) with doing nothing.

Making a bold choice, committing to one course of action and closing off others, causes anxiety. Data, we hope, will add certainty, and make us all feel more comfortable. The bold choice will also create discord. It's very unlikely that we will all agree on what to do. Data offers us the promise of settling the question in an objective, non-contentious way.

But there is a problem with data, one that makes it useless just when we most need insight. Data will only tell us about what is, not what might be. A supermarket might have superb data on its customers, but it won't say anything about how to attract new ones. It will tell you all about the punters who have left, but it won't tell you how to lure them back.

Data is great for optimising what you have, but not much help for creating things. It can help you increase sales on your website, but would never have prompted the idea of founding Amazon.

In sum, data supports management but gives you no help with leadership. And that's the risk. In the crucial moments, you need leadership, not management. Don't let the promise of 'big data' distract you into managing when you need to be leading.

Alastair Dryburgh is Chief Contrarian at Akenhurst Consultants. If you want less data and more insight, subscribe to his newsletter at www.akenhurst.com

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