One of the latest situations I've seen recently is product managers that want to make "data-driven decisions" when trying to establish their product strategy. Data-driven decision making (DDDM) is a trendy concept and, while it's appealing, the term is often misused and its limitations in innovative situations are rarely discussed. The justification for DDDM is often that it helps illuminate where our intuition would lead us in the wrong direction and, yes, intuition can be flawed, but so can data, especially when dealing with novel ideas. Gathering useful data about something nobody has experienced is challenging, at best.
Sure, there are tools for predicting customer and user behavior, but they're far from foolproof. In innovative situations, relying solely on data can be dangerous. The right decision in such cases is often a strategic gut feeling based on years of experience, industry knowledge, and an understanding of the people involved. It's a calculated gamble, mitigated by diversifying your portfolio of decisions to spread the risk.
However, some managers use the lack of perfect data as an excuse for inaction. Remember, data is expensive, especially primary data. Weigh the cost of gathering data against the potential benefit of making the decision with it. In some cases, overreliance on data can be detrimental. Data is only a tool, and its usefulness depends on context and interpretation. Without proper understanding, it can even lead you astray.
Worse, some use DDDM as a shield, allowing them to point to data rather than take personal responsibility for decisions. Experienced executives don't need this crutch. They can trust their knowledge and make timely decisions even in the absence of perfect data.
A balanced approach is key. Consider readily available data while not getting bogged down in the pursuit of expensive or elusive information. Industry knowledge, expertise, and even customer goodwill can be valuable decision inputs beyond just data. This requires experience and expertise in the relevant field, which can be challenging for executives who lack sufficient exposure. Instead of burdening them with data gathering, delegate to knowledgeable staff or hire experts who can guide decision-making and investment strategies.
DDDM is a useful tool, but it's not a magic bullet. Don't let it paralyze you or distract you from taking responsibility for your decisions. A strategic blend of data, experience, and intuition is the recipe for true success in an innovative landscape.