The Death of Data-Based Decision Making

Why Does My Industry Refuse to Use Data?

True story – of course, whenever anyone says or writes this it generally means that everything else they’ve ever told you is BS – anyway, true story: a highly compensated colleague wrote to a group of fellow highly compensated colleagues and asked “does anyone have any data on whether this widget produces results?”

The emailed responses from two of his highly compensated colleagues were shocking:

  • “I understand they’ve shown good results in Orlando and Tampa.”
  • “This widget really moves the needle in Dallas.”

These were their complete responses. Did I miss something? Where is the data?

This brief exchange of emails is merely a sample of what’s happening in my industry (and probably happening in other industries, though I don’t have any data to back up this claim): We’ve decided that actual data is unimportant.

This is sad, especially as technology has provided us easy, quick and painless avenues to gather data about nearly every aspect of our business. Gathering data and making data-based decisions (AKA: using business intelligence reports) should be one of the greatest benefits of technology we enjoy, yet we still rely heavily on gut feelings and opinions to determine where we spend our money, whom we hire, and what initiatives we pursue.

Data vs. Opinion

Having had my fill of opinion-based decision making where good data is available, I challenged the two highly compensated colleagues to send me some proof to back up their claims about the effectiveness of this particular widget:

“Sounds great, can you send me the data to back this up?” I replied, and waited.

And waited, and waited, and waited. After two days of waiting, I sent a follow-up email copying their direct supervisors:

“I know the Northeast Region really wants to get moving on this widget, and they’re excited to hear about the results you’re seeing in your markets. Can you send me some data that can prove the ROI? We’re struggling to show good numbers everywhere else with this widget and some good results would help save the project.” I wrote, and waited.

Amazingly, with their bosses copied and everyone on high alert to justify expenses, I received the following two messages from the highly compensated colleagues within 30 minutes:

  • “When we looked at the data, it seems it was inconclusive in Dallas. We’re thinking of canceling it.”
  • “Nobody in Orlando or Tampa could prove it works, but they’re sure it was helping sales. They’re going to measure the results this month and then make a decision.”

One claimed they examined the data (Dallas) and one still relied on opinion for now (Tampa/Orlando), but promised to examine the data next month. In the meantime, we’ve potentially wasted more than $100,000 over the past year because no one bothered to look at the data. This was just one product covering a small part of our business. What would we find if we stopped allowing opinions and held everyone to a “just the facts” dictum? Scary…

Data-Based Decisions are Easy

Our industry is one that has had to be pulled (kicking and screaming) into accepting that the Web is an important marketing channel. Now that we’re there, we refuse to demand data, information or business intelligence to help us make decisions. We rely on our collective gut, because our gut was good enough ten years ago, so it’s good enough today.

It’s a shame, really, because using only your gut to make decisions might appear to save you time. While using your gut to make a decision keeps you from having to gather data, it also requires that you continually reconsider the decision: using additional time to determine if you made the correct assessment. When you use your gut, you spend additional time second-, third- and fourth-guessing yourself. You are never certain you made the best decision.

When you use data, like an ROI report, you can quickly and easily decide to eliminate the low ROI widgets and increase your usage of the high ROI widgets. Then, you can put the data away until the next set of numbers (quarterly, monthly, weekly) becomes available. Give these new numbers a “once over” to validate you made a great decision last time or use these numbers to tweak your earlier decision, and move on. Nothing could be easier.

You Were Hired for Your Gut

The best part about using data to help you make decisions is that the data will never care if you also sneak in your opinion here and there. In fact, if not for your gut, your company could just hire a computer to do your job. It is precisely your experiences, history and opinions that make you a valuable commodity. You begin to lose your value, however, as soon as you fail to utilize all the tools (including data) made available to you to do your job.