Data-driven decision making requires one source of truth.

Almost every tech company and organization has jumped on the band wagon of Data-driven decision making. That’s great. However, not all of them are doing it right. Some are struggling. Some are making decisions the old fashioned way - based on intuition, based on relationships etc but think that they are making decisions based on data only because they keep an excel spreadsheet. When that spreadsheet is private and each person carries their own version, and data is entered into them manually, not only is it not data-based decision making (that is if a decision is arrived at), it could actually drive wrong decisions.

For data-driven decision making to work right, all parties have to be looking at the same data. There has to be one source of truth that’s administered in a transparent and consistent way. All parties — decision-makers, decision-implementers, partners and other stakeholders- have to be looking at the same data. Initially, different people could interpret the data differently. That is OK because it should trigger right questions and drive deeper discussions. Deeper discussions should lead to alignment and possible tweaking of data being collected or the analysis being used. If right data has been collected, multiple people asking the same question should get the same answer. Multiple people looking at the same analysis should interpret the same way and arrive at the same conclusion.

The best way to do this is to maintain a well governed database or data warehouse and have dashboards that optimize for different visualizations and allows for analysis on various dimensions.

The red flag is if different parties carry their own spreadsheets or have their own private repositories of data, in whatever format. In that case, data-driven decision making is just an illusion. Not just that decisions could be wrong, but also, it can breed mistrust among parties, which leads to friction and stress. All of these are factors that can doom results.

In other words, for data driven decision making, it’s important to have these two things:

  1. One source of truth — a well governed data repository that is consistent and trust-worthy.
  2. Dashboards that everyone can look at and get the same answers to the same questions, quickly.
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