If I hear the word “data-driven” once more today, I might just lose it.
Don’t get me wrong. You need access to relevant analytics. You need an understanding of what the data means and where it fits into your strategy. You need the ability to execute based on what you learn.
But for too many organizations today, analytics create an oversimplified impression of success while avoiding the more complex strategy and tactics that could bring them actual success.
“Just look at these numbers. We’re doing fine.”
But they aren’t always doing fine, no matter what their dashboards and charts say.
These companies are data-driven, but in all the wrong ways. Analytics should inform and guide decisions, but never, ever replace the vision and judgement of capable leaders. And data should never be used to gloss over—and avoid—the inconvenience of reality.
The (Over)use and Abuse of Metrics
Here are the most common scenarios I see, day in and day out.
- Analytics substituted for strategy, allowing organizations to focus only on metrics while ignoring tougher challenges and problems.
- Metrics cherry-picked to make a particular leader or department look good, even if they’re underperforming. Sometimes this is conscious and deliberate, but other times it develops insidiously over time.
- Employees spending more time on tasks and factors that are quantifiable. Those that aren’t measurable fall to the wayside.
- People looking out for themselves and gaming the data. If there’s an easy way to do it, they’ll eventually find it.
- Data that’s probably accurate but doesn’t contribute to the big picture in any way and doesn’t help the organization achieve meaningful goals.
What Analytics Can’t Replace
Yes, your data might be useful, but unless your people are experienced and capable, it means nothing. You must hire and promote leaders with the knowledge, experience, and (most of all) business judgement to put analytics in context.
I don’t talk a lot about this word—judgment—but it’s an irreplaceable trait, developed over years of winning and failing and learning every time you fail. Your decision-makers need sound business judgement, and if there’s a shortcut to acquiring this, I’ve never found it.
A leader with sound judgement will never need to cherry-pick facts and data. They’re curious. They want to know what’s really going on, and they’re skeptical of easy answers. They’re more interested in doing right than being right.
The Cure for Metrics Mania
- Always question the significance and relevance of the data. What does it really mean, and how does it contribute to strategy?
- Resist the common tendency to place blind faith in numbers. You don’t need to be a data scientist or hold a Ph.D. in statistics to question the validity and meaning of analytics.
- When evaluating your people, use different lenses, including intuition, “people sense” and communication. Don’t assume everything can be captured through quantitative measures.
- Be aware of the danger of cherry-picked metrics.
Above all, understand that analytics are revolutionary tools that can absolutely transform your business. But they should never be used as a crutch or substituted for strategy. They should never be offered as easy answers to complex problems, all wrapped up neatly with a bow on top. Instead, place your faith in effective leaders who know how to put data in its place and keep it there.