Harvard Business Review (HBR) April 2012
- Big Data, no matter how comprehensive or well analyzed, needs to be complemented by Big Judgment.
- Executives don’t manage information as well as they manage other assets. Their return on data investments is limited because they are under investing in understanding the information.
- Investments in analytics can be useless, even harmful, unless employees can incorporate that data into their decision making.
- Analytic skills are concentrated in too few employees. “Experts” are unwilling or don’t know how to train everyone else to make use of their analytics methodology.
- Leaders need to ensure that their processes and human capabilities keep pace with the computing firepower and information they import.
- Companies introducing new data analysis tools often overly focus on the tool itself instead of on how managers can use it to improve their judgment.
- Companies should focus on two things: training workers to increase their data literacy to efficiently factor into their decision making and providing access to the right tools.
- The best data-driven cultures have formalized their decision-making process based on standard procedures to quickly obtain and correctly use the most appropriate data.
Our Point of View:
- Balancing (50-50) the use of analytics and judgment is the key to consistently making good business decisions.
- Less than 20% of business professionals know how to intentionally strike the 50-50 balance.
- Over emphasis on one or the other (analytics, judgment) stifles growth and/or causes excessive variation wasting time, people, resources, and capital.
- Big data is only as good as the decision-making standards (Mind-set, Skill-set, and Tool-set) provided to those who access the data.
- Lacking decision-making standards, individuals rely on previous decisions (biases, experiences) and look for data to justify OR quickly drown in “oceans of data” and default to intuition.
- Anyone, regardless of age, experience, or title, can quickly and easily become an architect to make better decisions.
- Leadership is solely accountable to provide the decision-making standards to make the access and analysis of big data practical and useful.
- Forward-thinking executives are investing in decision-making standards to ensure they are getting the full return from their Big Data investments.