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Data Driven Management Decisioning

  Nov 16, 2018

As the talk around Data and different use cases continuing to gather impetus, I have been observing the efforts directed to a somewhat already converted audience (Mostly domiciled in the IT departments) and little effort being made sensitizing Business Leaders on the adoption of Data in Management Decisions. How well do we senior management truly understand how to make decisions? How might the data or results of analytics be used by others politically within one’s organization? There are long lists of cognitive biases and there has been a lot of hype about behavioral economics and non-conscious decision-making.  The human brain is essentially the same as it was 25,000 years ago. Hadoop and Support Vector Machines have yet to play a role in natural selection. We are cave people with computers and balance sheets and have a lot more to learn about how to use data to make decisions.

In my Executive coaching practice, while leveraging on my Data Science background, I find myself gravitating towards guiding my Executive clients unlock the challenges they are faced with through awakening their DQ, a term I have coined to mean Data Quotient, after IQ, EQ of-course. When coaching my clients, I use two broad criteria: Is the challenge they face internally consistent? Is it supported by actual empirical evidence? Data Intelligence will soon be a key ingredient to drive business transformation and disrupt the status quo. Most management practices we are experiencing at this moment and time are bereft with requisite criteria to govern decisioning. As such we have seen most company reacting a tad bit to late in the game leaving them exposed to disruptive trends. This in retrospect has led to most organization being forced to resort to redundancies, diversification, firing to rehire, and most commonly, toxicity born of corporate politics.

Take a look around the corporate scene and you will for sure notice the above trends in benign or acute manifestations.  We’re told that data are the new oil. But oil is useless unless we know how to use it. In my typical coaching intervention with executives, i take the position that raw materials are raw materials until they’re put into use, and how they are used determines their value. This, in turn, can change over time. It then becomes my purpose as a coach to create awareness to the executive of the available natural resources within their organization and turn that into insights that will inform the strategic decisions towards addressing the business challenge they face. In the heat of battle, many of us have gotten into bad habits, and one is confusing tactical and strategic decisions. Not all decisions must be made instantaneously, In my opinion, to become the new oil data will need to be more fully utilized at the strategic level of decision making, not tactical.

Use of data to make decisions is not new. Crows, which live for hundreds of years, can count and use this innate ability to make some decisions. Paleoanthropologists have discovered evidence of humans keeping records thousands of years ago. Ancient civilizations used data and the pyramids could not have been built without data. Data have been a part of military decision-making for centuries and merchants have always used data, even if crudely and unsystematically.

There are many ways data can be used to make decisions. One way is to study change over time. In a business context, we may study stock prices, sales, and operating profit of a company for the past decade. Believe is significant here since beliefs most strongly held are often the least accurate. We tend to become ego-involved and emotional when cool heads and detachment should prevail, and this has led to many Executives lean towards wrong direction.

Data has a different take on decision heuristics. These reservations aside, used judiciously, awareness of these biases can help decision makers become better decision makers. So, as a coach my final question is: Have you considered how some of the data biases may have influenced how you make business decisions?


Timothy Oriedo

Executive Coach and Data Scientist

Strathmore Business School

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