Have you ever thought about how many decisions you make in a day? Some researchers believe the total is somewhere north of 35,000! Many of these are obviously insignificant, but all of them have ramifications. The more important the outcome is, the more we want to be as certain as possible that we get it right. The best way to do this is to use data as the driving force in the decisions that we make.
I believe there is no better way to gain experience than by immersing oneself in the entire data process. A focus on data would help the novice better understand inputs and outputs, actions, and results. Years of acquired wisdom should not be considered a substitute for data driven decisions. Instead, experience should be relied on for better collection, analysis, and use of data. PwC found in a recent survey of top executives that “Data-driven organizations are three times more likely to report significant improvements in their decisions around innovation, growth and competitive advantage”.
When beginning the process of determining data’s role in your organization, the first step should always be to analyze what results you hope to achieve. Once you understand where you want to go and what it will take to get there, you can begin tracking progress. For example, let’s say that you purchase a one-way rental car and need to drive to a city in a neighboring state and want to know how much gas you should put in before you leave. What specific information would you need in order to reach your answer? How many miles away the town is? What the gas mileage of the vehicle is? What the price of fuel is? Yet, many people don’t take the time to make their decision. They end up overfilling the tank and wasting money, or underfilling requiring another stop at the gas station, and thus wasting time.
Now that you understand where you want to go, assess where you are now and what it will take to reach your desired state. This will help you know what to track and which metrics to set up to track success. In the rental car example, you would want to use a GPS map to ensure traveling in the right direction and track things like actual mileage in order to be certain your estimates were correct.
Data in a vacuum isn’t always helpful, though. Multiple data points over several periods are most useful. This will allow you to pick up on trends over periods and correlations between different metrics. If you owned a car instead of renting one and could track actual mileage, gas purchases, maintenance frequency, hours traveled, time of day arrived and departed, etc. over several trips out of state, you would have a tremendous amount of information on which to base your next trip.
What if the next trip isn’t for you, though? Perhaps it is your child or a friend that you are analyzing this data for. It is important to know what motivates them so that you can present your data in a way that is most useful, and in a way they can easily understand. For instance, if the reason they are traveling is to make a flight that they are running late for, data regarding the best gas mileage isn’t going to be the best motivator. If it is your child, however, and you are paying for the fuel, you can still provide them with information to ensure they make a decision that both reduces travel time and fuel cost.
While this car travel example may seem elementary, I feel that it is very representative of decisions we have to make every day in our businesses. How often do we get in our car and drive without consulting a map, traffic news, or fuel gauge? How often do we plow ahead with a decision without taking the time to run a full analysis on our data to prove that the option we are proceeding with is best? In my experience, I believe more decisions are made without data, with insufficient or incorrect data, or are lacking adequate understanding of the information that is being used.
Herein lies an opportunity for every individual and every business. We each have the ability to access tools that allow us to make better decisions each day that can lead to dramatic improvements in safety, employee and customer engagement, and profits. With all that is at stake, are you really ok with making decisions based on your intuition?
REFERENCE
http://science.unctv.org/content/reportersblog/choices
https://www.pwc.com/us/en/services/consulting/analytics/big-decision-survey.html
https://online.hbs.edu/blog/post/data-driven-decision-making