Growth Insights for CEOs

6 Reasons Why Data Always Matters

Posted by The Chief Outsider

“It is a capital mistake to theorize before one has data.”  Arthur Conan Doyledescribe the image  Sherlock Holmes solved cases by analyzing information and connecting the dots. He relied on both sides of his brain. Many CEOs building their company are creative and intuitive. They rely on their gut instincts. These characteristics are part of the reason they became CEOs. However, paying attention to the data makes the difference in whether these characteristics are great strengths…or great weaknesses in leading their companies.          

  1. Data helps overcomes our subjective biases. It stops us from believing what we want to believe. Each of us is subject to biases, based on prior experience, education and culture. There are people we instinctively believe are talented and others we believe are not.
  2. So CEOs must examine the data. Then they can form their hypotheses as to what is going well and what is not. They can develop questions and theories. Too many times leaders meet the people first, form impressions and later interpret the data to coincide with those impressions.
  3. Data can be a friend or an enemy.  It must be interpreted wisely. For example, if the data shows that people in Belgium take three times as many sick days per year than those in the US, an easy conclusion might be that there is an issue with health in Belgium. There must be further study on possible reasons for the differences before drawing conclusions. Correlation does not imply causation!
  4. Before a company’s reality can be changed, reality must be defined.  If we didn’t have the data showing the differences in number of sick days, we would be operating in a vacuum. Having good data helps define and develop solutions to issues.
  5. Data forms the irrefutable logic of results. If the data shows a problem, there is a problem.  The CEO may not have clarity around the problem, or know how to solve it, but he or she won’t put their head in the sand and ignore it.
  6. Data can help find the bright spots!  Even in a low performing environment, there will be some areas or people performing better than the average, whatever that average might be. This allows us to examine what they are doing differently and seeing if it can be successfully shared with the rest.

    The bottom line is that CEOs need both their intuition and data to produce the best results.  Too much of a reliance on one or the other can result in misunderstandings and mistakes.  And today’s CEOs cannot afford too many of those. 

    (It turns out that in Belgium, there are strong unions and generous sick-day policies. Most absences are attributed to minor depression.)

    - Barbara M Fowler, CMO

    Topics: Data Matters in Marketing