Let facts power your business decisions
Tweet it:'Today, most organizations have access to more data than they will ever use. What they lack, are the right tools and the necessary experience to access and harness the data effectively'
In a recent webinar for Deltek, I looked at the importance of making business decisions based on facts, and how organizations can rise to the challenge to pursue truly data-driven decision-making.
It was a very productive discussion, and one thing that was clearly highlighted was the need to take into account both human limitations, and managing the effect of biases on our decision-making. So what does data-driven decision-making involve, and what were the key takeaways from the discussion?
Creating Context and Insights Using Data is Key
Today, most organizations have access to more data than they will ever use. What they lack, are the right tools and the necessary experience to access and harness the data effectively.
In previous roles, and at my current work at Whispr Group, I rarely help clients discover new data that they did not already have access to, all be it in a raw format. Rather, the skill is to present the data in a better visualized form, so that they can comprehend it and create meaningful context and insights around it.
Intuition and Rational Thinking Go Hand in Hand
One question from the webinar, was on the role of intuition in effective decision-making. If humans have such a hard time using data to make decisions, is it really worth the effort to even try to do so, rather than being guided by simple intuition?
I would argue that we always need to balance that intuition against cold, rational thinking. Our intuition is often a powerful tool for making good decisions, but we also have to be acutely aware that we live in a complex constructed society where using intuition as a guide is no longer enough.
Take the example of climate change: our intuition simply can’t guide us to take the necessary decisions to address what is a global problem. We have to consider all of the facts available, rather than being guided by feelings when facing such a threat. If we were to be guided solely by heart and not by our mind, we run the risk of not doing what is most effective and deeply needed to put a halt to global warming. By looking at data and facts, we can instead assign resources and put our focus towards where it’s mostly needed to make the biggest positive impact on nature and climate.
Another example is found in the workplace: how to organize ourselves in the most efficient way as part of a project involving multiple processes and numerous staff is not something that can be guided solely by intuition. We must have processes in place for accessing the required data, and also to enable us to avoid the many mental roadblocks that can hinder us. So whether we discuss decreasing our environmental impact, or keeping our organization running smoothly, we have to operate in a more fact-based manner.
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Understand How the Human Mind Works When It Comes to Decision-Making
Another consideration is if the human brain is a part of the challenge - how is it even possible to address it as an individual? We can’t change how we as human beings are being wired and how our brain works. It is part of how nature created us. However, we can be aware of and appreciate how we function and in that way we come a long way towards not listening solely to our emotions and instinct, but rather focusing on facts.
It’s important to learn how the human mind works in order to recognize our own biases. We need to acknowledge when the mind is beginning to make decisions based on intuition, when in reality it would be best served by more rational thinking. As mentioned, it’s important to understand the power of intuition– both how it can be used, and when it should be used.
Data-Driven Decision Making is Possible
Being data-driven and making fact-based decisions is not an impossible task. We have all overcome many challenges to be where we are today with very complex lives, and we do have a capacity to be data-driven and exercise analytical thinking. It’s something we need to practice and we need to acknowledge that it’s a challenge to overcome our biases, and use the right tools to access and harness the data available at our fingertips.
To summarize, when it comes to making solid business decisions based on facts there are three top things to keep in mind.
Know your limitations:
Keep in mind, we’re not geared to naturally make decisions based on data but rather react to our instinct and gut feeling. If we can acknowledge this and remember this limitation, half of the battle is won.
Have the right tools in place:
To help you harness the data and capture the insights you need to make the appropriate decision, it’s important to use the right tool for your type of business and industry.
Remember your employees:
Your tools are only as good as the people using them. You need to invest in your people and make sure they feel comfortable using the available tools and to understand what is being presented. Only then they can comfortably make decisions based on facts.
About the Author
Olof Gränström is a lecturer, political scientist, historian and business economist. He has previously worked as an organisational educator and developer, and as an expert at the Swedish university. Olof’s experience also includes working with the foundation Gapminder, founded by Hans Rosling.
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