The focus on data and data-driven decision making isn’t going away. That’s a good thing. But, despite the push and all of the data, decisions aren’t being made any better or faster. The problem is that many leaders are missing the point. Big Data (or any data) isn’t about the data. It’s about the insights gained from data. Yet, too often leaders focus too much on the numbers.
Here are ten simple rules to help you navigate a world of ubiquitous, voluminous, and dynamic data.
Rule 1: People want answers, not numbers
You don’t manage numbers. Neither does your boss. You manage issues, risks, opportunities, people, products, processes, technology, and ideas. So why do you keep talking to your boss about numbers? Numbers should support the conversation, not be the conversation.
Rule 2: The more data you look at (at once), the less clarity you’ll gain
The research is clear. Our conscious brains cannot handle a lot of data at one time. When confronted with too much data, your unconscious mind takes over and starts making decisions about what information to ignore, combine, or generalize prior to passing it along to your conscious mind. While your unconscious mind is extremely efficient at working with information, it’s not always effective. To quickly make sense of new situations, you unconscious mind often aligns new data with your past experience or beliefs (i.e., adjusting data to fit your experience and beliefs rather than the other way around). As the amount of information placed in front of you increases, the clarity of what that information is saying decreases significantly. Most tables, charts, graphs, and reports contain way more data than our conscious minds can handle. Stop providing data dumps and instead provide synthesized conclusions, answers, and decisions. Stick the charts in the appendix.
Rule 3: Simplicity drives understanding
The conscious part of our brain is easily overwhelmed by details. Simplicity creates understanding. Crisp, concise statements are easy to understand. Long, drawn-out explanations create confusion. Make your statements simple and clear. The easier it is for someone to understand you, the easier it is for them to agree.
Rule 4: Context creates meaning
Meaning is created by making connections. Our brain uses context (or the big picture) to make sense of details (not the other way around). Think about a puzzle. It’s much easier to understand how the pieces fit together if you start with the picture. Trying to figure out the picture from the pieces is less efficient and takes a lot more time. Data work the same way. Our brains can’t interpret details without a framework in which to place them. To connect the dots, provide context. When our brain understands the bigger picture, it is able to fill in the blanks between details.
Rule 5: Data do not sell your argument, your reasoning does
While facts play an important role in supporting your argument, they do not sell it. Before you get to the facts, you need to provide the reasoning. If someone disagrees with the reasons that you provide for a decision, they will not support it. Data prove that your reasons are factual but that doesn’t make them correct. Start by establishing your argument with a clear assertion supported by your rationale. Then use data to show that the rationale is based in facts.
Rule 6: Your boss needs a prosecutor, not a mystery writer
Mystery writers wait until the end of their novels to reveal the answer. That’s a fantastic technique for creating suspense and entertaining. However, your boss doesn’t want to be kept in suspense or entertained. Neither do your peers, your customers, your team, or your business partners. Become a prosecutor. Make your argument and then lay out your case (with data). It will drive more effective decision-making, and more importantly, it will give people what they wanted in the first place, an answer to their question.
Rule 7: Not all of the data related to a problem are relevant to solving it
Technology allows us to capture a lot more information about something or someone in a much more fluid and dynamic way. However, just as a doctor doesn’t send you for an MRI to diagnose a cold, you don’t have to gather every conceivable data point on a topic to make a decision. The first step in reducing the amount of data with which you interact is figuring out which pieces are actually relevant to your decision.
Rule 8: The story in the data is incomplete
Data provide a cross section of a specific part of your business. However, data do not exist in a vacuum. The same data can take on very different meanings depending on the circumstances surrounding them. Data can tell you how something has performed, is performing, or might perform. It can also tell you how one or more things relate. However, without filtering that information through your business strategy, model, and plans, those numbers have no meaning. It’s your job to understand how that snapshot informs the broader story of your business. The story is not in the data, the data is part of a much broader story.
Rule 9: It’s easy to get lost when you don’t have a direction
You wouldn’t cross the ocean without a compass, map, and destination to guide your way. Yet, we constantly wade into a sea of data with no idea of what we are trying to find. It’s hard to find an answer when you don’t have a question. Stop reading reports like books (top to bottom, left to right). Instead, guide your data exploration with a question, a hypothesis, or decision. Doing so will enable you to navigate your reports much faster and much more effectively.
Rule 10: People don’t read reports for the numbers
What are you trying to figure out when you look at your reports? Believe it or not, it’s probably not the specific value of a specific metric. You probably are looking at your reports to figure out where to focus your attention or what people, business areas, or projects were on track. None of those questions are answered with a number. However, most reports, even color-coded reports, are designed around numbers. You have to figure the answer out for yourself by comparing the numbers or mapping the colors (in your head). While that’s not a difficult task, it’s unnecessary. Instead of organizing reports around numbers, why not organize them around decisions? Simply figure out what question you want answered and then organize the report around the answer, not the data.
Shift your focus from data to decisions
None of these rules negate the need for good data. In fact, if your conclusions and decisions are not based in data, don’t bother with them. These rules assume that your decisions and actions are grounded in fact and can be supported with evidence.
However, working in a world that is awash in data requires finding new ways to navigate and cut through the noise. Adopting these new rules for rethinking data will make you a more efficient and effective data-driven decision maker. The power of data is not in the individual bits and bytes. The power comes from transforming numbers to insight and more importantly, action.
Brad Kolar works with Avail Advisors LLC. Avail helps executives drive clarity and results in an increasingly changing and ambiguous world. The Ten Rules of Rethinking Data are featured in Avail’s Rethinking Data workshop. For more details about Avail Advisors or the Rethinking Data workshop, please visit us as www.availadvisors.com.