We have become accustomed to talking about being data-driven. But should we be?

‘Data-driven’ implies that we are led by data. Data rules – and determines if not dictates decisions.

There are clearly some problems with that.

The first is that the data needs to be seen in context. There are judgements to be made, a thought process that should intervene between data and decision or determination of a path. There is a need for expertise, for experience, for people who know and understands the context to analyse the data and come to considered conclusions. The conclusions should be based on or informed by but not solely determined by the data.

The second problem is that data is hindsight. It is collected based on past information or in ‘real time’ but is based on what has already happened even if that was very recently. This may not be helpful and is certainly not visionary. We need to apply our foresight. The data may deliver information on trends but cannot predict an end point, a future which as we know can change at any point.

The third problem is that we fail to accept the limitations of our data. As an example, the company who tells you that 85% of our customers are ‘very happy’ with our service have collected this information based on those who responded to a customer survey. Those who respond to customer surveys are a subset of people, those who are more inclined and have time to respond, and it does not represent the view of every customer. It may be that the service is not well received by those who are busy and time challenged which could be a significant part of their target market. Obtaining reliable and valid data that incudes all relevant segments of the population is often impossible.

Therefore, the challenge lies in being ‘data informed’. We need the data, we need to understand what has happened and what the trends are, but we then need to apply expertise, analytical thought and judgement to make decisions and set direction.

Data is a tool and a resource not an end point.

The key is to use the data well, to analyse it by adopting a rigorous and disciplined structured thinking approach, used by all the major consulting firms worldwide, to ensure that data is effectively analysed and full value is extracted.