This is the first in a three-part series about data use in decision making. It is based on my PhD research between 2011 and 2015 that explored how senior business leaders used data as part of their decision making processes. Find part two here and part three here.
Over the last decade, businesses have undergone a flurry of investment in big data technologies, platforms and analytical teams. The result of this is a crowded marketplace of dashboards, consultants, researchers and analysts all fighting for a slice of the big data pie. Business leaders are now confronted by a dizzying array of data sources and data insights.
Between 2011 and 2015, I conducted PhD research that focused on how senior business leaders incorporated data into their decision making process. My research was one of the first academic studies to look at the human side of big data. Specifically, I wanted to understand how business leaders coped with the overwhelming number of available data sources at their disposal.
My research centered around two questions:
- What factors influenced the selection of data sources by senior business leaders in decision making?
- How did those factors impact the way data sources were used by senior business leaders?
My research involved interviewing and surveying hundreds of senior business leaders across the United States. Respondents were selected from a senior pool of business leaders to ensure insights were from professionals who were more likely to be using data to help make significant business decisions. While prior academic research focused on manager-level respondents, my research targeted a more senior audience, Director-level and above, and Vice Presidents, Chief Financial Officers and Chief Executive Officers were all represented in the sample.
Earlier research and industry articles suggested that many business leaders made decisions without data. However, one of the first insights to emerge was senior business leaders were attempting to incorporate multiple sources of data into their decision making. I suspect this shift was largely because senior business leaders now have access to vast amounts of data, often at the click of a mouse button.
The second and most significant finding was that senior business leaders were influenced by multiple subjective biases when selecting and using data in their decision making processes.
Specifically, four subject factors were involved in selecting and using data as part of a decision: organizational filters, personal experience bias, time-based constraints and project requirements.
It is understandable, but not ideal, that business leaders rely on subjective filters to select data sources when making a decision. My research showed a high complex and confusing web of data sources available to business leaders. Consultants, platforms, internal teams, big data companies, research organizations and industry analysts are just some of the examples of data sources fighting for a business leader’s attention.
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These findings show that business need to invest in data management and data use systems alongside big data technologies. Otherwise, business risk their technology investments going to waste if business managers aren’t able to leverage the potential of data insights.
In part two of this series, I expand on each of these findings with more detail. In part three, I conclude by outlining some suggested tools and frameworks that can be used to encourage business leaders to use data more effectively.
If you’d like to discuss my research or this topic in more detail, I’m always happy to chat with others interested in this space. Find me via the interwebs at chrisdowsett.me.