How to Use Data for Decision-Making
"If you want to make good decisions, you need good data.”
These words by Steve Ballmer, former CEO of Microsoft and successful businessman serve as a reminder of the importance of data in decision-making. As businesses and organisations continue to gather increasing amounts of data, the need to use that data effectively to drive decision-making has become crucial to success.
Avoid Cognitive Bias
Data allows organisations and individuals to create a better perspective of the world. With more data points we are able to collate different viewpoints of a particular situation or event. In essence having more sources of data means you’re reducing the chance of cognitive bias influencing decision-making. A cognitive bias is a systemic error in thinking that occurs, when people are interpreting information about a specific topic in a way that affects the decisions and judgements that they make. By having more data points to compare the likeliness of cognitive bias affecting the decision-making process is lowered already.
Improve Decision Making Processes
When you start using data to drive the decision making process you’re less likely to rely solely on intuition and experience. Your human gut reaction can be naturally risky versus when we compare them to data points it doesn’t compete on accuracy. As the american statitistian known for his theories of management and leading thinker in the field of quality, W. Edwards Deming has already stated: “Without data, you’re just another person with an opinion.”
Using the relevant data helps you back up your intuition with data and lets you assess all the risks associated with a decision.
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Cost Savings
Many times, people do not realise the cost-defficiency of their decision-making processes. Once committed to a decision, little organisations go back to see whether another decision could have been more successful or another process could have been more effiecient.
Now, when you introduce data into the equation, things change. Studying the data makes you realise there were actually even more cost-efficient ways to achieving something. So, data-driven decisions are not only outcome-based, but they ensure the most efficient process to get there.
Track Your Progress
Setting a goal with no metrics to track your progress of achieving it, sets you up to fail. Data is not only easy to measure and evaluate, but also enables an objective means to evaluate the strategic direction taken. Unlike the conventional decision-making process where you must make a certain decision first before evaluating how it played out, data-driven decisions can be evaluated before they’re implemented. Foreseeing how the decision you are going to take, will impact your organisation is one of the biggest advantages of using data in decsion making processes .
Need Data to Take Better Decisions?
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