Moving from Anecdote to Empiricism
Modern science has its origins in medieval alchemy: the difference was in the use of data. Businesses also need to transition to data-backed decision-making.
I gave up Biology for Greek at age 13, so I was a little over-awed when I recently visited the Royal College of Physicians in London. In the museum, I was fascinated and a little horrified with the dissecting tables and scary-looking surgical instruments from the 1700s. At this time William Harvey and others were throwing off the 1000-year old shackles of the adopted wisdom of the ancient Greeks: Aristotle and Galen.
At the time the Royal College was founded (1518) all sorts of medieval practices were being overturned by empiricists such as Newton, Lavoisier and Harvey who started the road to what we would call modern physics, chemistry and anatomy respectively.
Out went the incantations, spells and dogma. The emerging scientists came up with a formal method for evaluating hypotheses with experiments, which we now call the scientific method. The Royal Society was founded with its famous motto of ‘Nullius in verba’ meaning ‘take nobody’s word for it’.
For business leaders, a new approach to data-based decision making is needed: it’s time to move away from gut-feel and tradition. Enterprises need to have the mindset of William Edwards Deming an American statistician. whose most famous quote is
In God We Trust, all others bring data
When deciding whether to fund a promising drug, all pharmaceutical companies are required by their licencing authorities to submit the new procedure to the discipline of double-blind clinical trials. Take nobody’s word for it.
What can other business leaders learn from this discipline? Sometimes our processes seem more like the age of alchemy due to their disturbing lack of data. Not quite spells and incantations, but I certainly hear “We’ve always done it this way”.
Are companies ready for data-backed decision making? There’s more to becoming an Intelligent Enterprise than having a few spend cubes and a bit of automation. Data needs to be incorporated into every decision, every process and every leader.
As Jim Barksdale, former Netscape CEO famously said
“If we have data, let’s look at data. If all we have are opinions, let’s go with mine.”
Its comforting to want to stay in the world of anecdotal-decision making. Stories have mighty persuasive power, which is why even in modern times doctors have to compete with the most bizarre claims from the Internet. But business leaders need need to get away from alchemy, and introduce data-backed decision-making into the Enterprise.
For more information on how SAP is using data-backed decision making to deliver the Intelligent Enterprise, take a look here.
