Analysis Paralysis

Raise your hand if you've been personally victimized by the phrase, "What does the data say?"

It's hard to argue with making sound business decisions grounded in data. The topic is so popular that HBR has a whopping 366 pieces of content on being a data-driven organization (and why it's so hard). Most companies maintain an extensive amount of data on customer behaviors, performance, employees, processes, and supply chain. But a good leader knows that using data as a crutch isn't a sustainable strategy when it comes to making decisions. 

If managing a business was as easy as reading a few Power BI dashboards, every MBA student would have the qualifications to lead a large organization. The reality is leaders must be prepared to draw conclusions with or without extensive data. 

The Data Doesn't Exist

It's hard to believe, but despite the number of data points available to us today, sometimes there are still things we do not know or do not have access to. At one point I worked for a leader who simply couldn't understand that given certain constraints imposed by our legal structure, there were some pieces of data we just didn't have. She became fixated on this issue rather than finding ways to move the business forward that were relatively obvious, but perhaps difficult to quantify given the lack of certain information.

If the concrete information you're hoping for isn't attainable, it's time to get creative. Can you gather some qualitative information instead that is directional in nature? If you can't measure the upside, can you at least outline the risks and the downside? Do you have an understanding of the cost of inaction and maintaining the status quo?

The Data Is Incomplete

When we rely on certain reports or metrics in isolation, we risk failing to understand the larger story. 

- Sales leads are up. Great, but what about conversion? 

- NPS improved. Okay, but did we actually improve it for the customers that matter the most?

- Employee sentiment is better. What was the survey response rate? Did the respondents feel they could respond honestly?

Asking the right questions about the data we rely on paints a bigger picture and helps ensure we don't oversimplify complex situations.

The Data Isn't Forward-looking

We've heard it a million times and yet we still forget - "Past performance is not indicative of future results."

Sometimes trends are clear and there are predictable patterns, but certainly many things over the last two years have not been predictable based on surface-level metrics. Take time to periodically reevaluate which data points your team considers lagging vs. leading indicators and how each set impacts your decision-making.

TLDR: You should have a POV on your business regardless of what reports are available to you. People don't follow data, they follow leaders.