Very early in my career I was told by one of my mentors “Research is a light to guide your way not a lamp-post to lean on”. It’s a perspective that has stuck with me and which these days applies equally well to data of any kind.
While I’m a great fan of the insights that data can give us and a supporter of any attempt to gather, manage and apply data to the decision-making process, I’m becoming increasingly concerned that in certain quarters there’s a growing expectation that data can actually make the decisions.
Entrepreneurs past and present from around the world have made business decisions without the insights that data now provides for as long as we’ve had commerce. The good ones seem to have an instinct that the rest of us can only wonder at. Sure, there are times when the Midas touch can be enhanced with a little data input, but, as we enter the era of cognitive computing even Jon Iwata, the man behind IBM’s Watson project, isn’t claiming his ward is going to take over the decision-making process. An article in BigThink this month points to Moore’s law as suggesting that we will all, one day, have personal Watsons, but it seems that even then the real decisions will remain ultimately gut feel and Watson doesn’t have a gut.
Now I suspect that this may upset the apple cart for a lot of corporate executives who, right now are preparing a boardroom seat for the infallible manager. We’ve already seen a reduction in the average age of senior managers in recent years as corporates in particular strive to reduce their payroll and in a survey earlier this year the majority of senior managers said that they felt they were out of their depth in their job and didn’t expect to be able to hold it down for more than two years. The thing is that the ability to make good decisions is fundamentally the product of experience and even though cognitive computing does, in a way, represent analysis by experience, what I see happening right now is that we are hiring young, less experienced managers on the cheap and then attempting to supplement their shortcomings with data. It’s a strategy that isn’t working, nor will it.
There are numerous chicken and egg debates that we can get into on our way to determining why managers are becoming risk averse. It may, for instance be because the stakes are higher (which they undoubtedly are) but for my money it’s because today’s younger managers are insecure because they lack the experience that feeds their instinct?
We are told that data speeds up the decision-making process, but there’s nothing quicker than Henry Ford’s “Nope, it’s black or black”, so don’t tell me that collecting data for three years, getting a room-full of analysts to comb through it and then hiring an interpreter to tell us what they are talking about is getting us there any quicker. Its not always more accurate either. Analysis is a cold process and fails to account for human frailty. Not everyone thinks like an analyst, so I’m not backing one to tell me for sure what Gladys from Chipping Norton’s motivations are when she’s doing the weekly shop.
No, its all a bit of a cop-out really. What we do know is that a buying decision is based on primal instinct. We buy what we like and then use rational argument to defend our choice because, somewhere along the line, we’ve been told that this is what grown-ups do and that’s exactly what it seems managers are increasingly doing with data. Its a cover-up, a hide-behind. “You can’t blame me for this cock up, the data told me to do it!”. Why can’t managers just accept that there’s risk in decision-making and the law of averages (which data can’t influence) says you get it wrong occasionally? The measure of a good manager is that he gets it right more often than wrong and if you make too many mistakes you get fired, but that’s the deal. You should be a grown-up by the time you get there, so get over it and let’s get off this mission to manufacture infallible managers and get on with the job.
The best way to build a business is by investing in your people. Train your managers. Enable them to accumulate knowledge and by the time they reach an age when they have enough experience to make valued judgements they have the kit to do it with. Let experienced and prepared people use data to refine their instinctive decisions rather than actually make the decisions for them and you’ll reduce failure rate and increase ROI.
Originally published on LinkedIn 2014
Phil Darby
August 1, 2018