I recently received a fancy fitness monitor as a gift. It tracks my heart rate as well as a bevy of other stats about my body, everything from how much I sleep, how well I sleep, to how my heart rate changes during exercise. The amount of data now at my fingertips is staggering.
But then I asked myself a simple question: what was I going to do with all this data? Was I really going to change my behavior because of it?
The answer I came up with was, no, I wasn't going to change my behavior--which meant that all this data was close to worthless. I even talked to a friend of mine who received the same device. He, too, was excited about all the data he was getting about his body and he's an accountant so he loves data. But when I asked him what he was going to do with all that information, he just kind of looked at me. He didn't know. He wasn't going to change anything either.
The lesson here for business is that having too much data can become a fatal flaw--especially because we now live in the Big Data era where everything is being tracked, recorded, and analyzed with machine learning. Data has become a valuable asset-- there are whole businesses based on Big Data, Advanced Analytics and Data Science - but only if you know what to do with it.
Otherwise, it's possible you can overwhelm and drown your business and your leadership team with too much data. Rather than helping you make decisions or reduce risk, too much data can actually slow you down to the point where you can become paralyzed. It's the old saying about analysis paralysis.
I've written before about how you really only need 75% of the information available to make a decision. The goal should be to move faster than the market--not to accumulate more data than everyone else. The trap that I see so many managers fall into is that they struggle to find the line between having the right amount of data--but not too much where it becomes stifling.
I have worked with leaders who become obsessed with accumulating more and more data as a way to make the perfect decision. But, by delaying any action for weeks or even months at a time, you can find that the market has beaten you to whatever opportunity might have existed.
In other words, in your attempt to avoid risk by collecting more data, you have put your business into an incredibly risky position. That's why high data needs can become a fatal flaw for leaders. We haven't even covered the organizational cost in accumulating an analyzing those masses of data, when people could be doing more valuable work.
Go ahead and feed your computers as much information and data as they can handle. Let the machine process all day long. But when it comes to the data you need to make decisions and take action, think about having less can actually be more.
And just like with my heart rate monitor, consider what you can actually do with the data that you do collect. If you're not willing or able to change your behavior or make decisions with it, that data might not be as valuable as you thought in the first place. It might even be a distraction that is taking your eye off more important targets. . The good questions to ask are; how will my decision change with more data? And, what is the cost to the organization of that incremental reduction in risk?
So when it comes to thinking about data, collect enough to be valuable but not too much where it becomes your leadership fatal flaw.