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In an age saturated with data, why do business leaders continue to make poor quality decisions?

The Lime Group | Articles

Kate O’Connell – Organisational Consultant

With the evolution of the internet and mobile technologies, we have 24/7 access to new data and with that, comes a temptation to want to absorb it all.

Organisations are constantly storing and referring to multiple sources of data to enable them to make informed decisions that will ultimately drive improved business performance. After all – informed, data-based decisions have the potential to set organisations apart from the crowd.

The key word here is ‘informed’ – in my experience working with leaders, making informed decisions is something that they often consider a strength. They acquire stacks of spreadsheets, sift through piles of reports, or get the best analyst in the business to pull stats for them – and are subsequently sure that they have a great feel for the organisational landscape in which they operate. But more often than not, these decisions don’t drive improved business performance quite as leaders hope, and we are left wondering why so much input and data isn’t adding value.

For me, there are two reasons. One is, leaders naturally focus their attention and curiosity on only one type of data – quantitative, operational data. This is the space where they can apply common strengths in analysis and critical thinking, and is the default place to focus effort if the business is not performing. In fact, qualitative data gathered from conversations with leaders, observations of team behaviour, and dialogue with employees is equally, if not more, valuable in helping leaders understand their organisations. Having quantitative and qualitative data in focus propels leaders to take a holistic view of their organisation as a system within which there are many interdependent levers. Taking action without this ‘system view’ almost always leads to unintended consequences that impact the organisation’s ability to progress.

A second reason that massive data inputs aren’t adding up to better decision making is that leaders rarely take the time to turn any broad collection of data into meaningful insights. Both quantitative and qualitative data in their most basic forms are overwhelming and meaningless. And in today’s fast growth, highly competitive world, data is too often taken at face value and acted on in a knee-jerk manner to answer an urgent need. Moreover, when absorbed at speed, the data is viewed through existing bias filters, meaning most of the time leaders end up simply using data to validate their existing conclusions.

Valuable time and resources are wasted as leaders do what they would have done anyway, and zero progress is made. How do you know this is happening in your environment? You, your team or your organisation are making the same mistake multiple times at the expense of meaningful growth. The real value to be gained from data is the meaningful insight you get when you take the time to sit and wrestle with it, question it and ultimately organise it into powerful, actionable insights.

When lacking these two critical habits, the result is a senior leader who is less able to problem solve on what is impacting performance because they are either focusing on quantitative data in isolation or not doing enough to turn the data into something that will tell them what’s really going on.

In summary – data is king, but only if we actively search out the right types of data, and spend time wrestling with it to extract the actionable insights. Where the initial 80% of the work can easily be delegated and actioned by others, it is this last 20% of the effort that sits with the leader to own. And rightly so, as the reward for that final push is “missing pieces of information” that have the potential to unlock and even supercharge business performance.


Next in this series: exploring Lime’s physical data gallery – their impact and why we use this data approach to help clients think differently.