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Why You Should Make Data-Informed Decisions, Not Data-Driven Decisions

In today’s world, data has become too important.

Don’t get me wrong, data is (obviously) super important.

But it’s not everything.

Here’s an example. Right after the 2007-2008 financial crisis, head of the Fed at the time Janet Yellen said, “we need to make more data-driven decisions.”

That made sense coming from Janet’s perspective. When you’re the head of the Fed and the United States economy is tanking, you want to be very even. You don’t want to shake up your investors even more because they’re going to keep doing wacky sh!t — so you need to be very calm, no emotion, just data.

When I first started StarSpring, it was a lot of the same thing. We wanted to help executives make data-driven decisions. But because of some of the things I’ve seen since starting my company, I’ve changed my language from data-driven to data-informed. Here’s why that little shift matters.

Say you start making data-driven decisions, and you have data…but your data is sh!t. Now, you’re making decisions based on sh!tty data.

When I worked at a large transit agency in the northeast, we had a C-level executive in charge of the project who was more of a politician, deferring to her business and technology folks to help her make decisions. Her decisions were based both on data and on anecdote, and she trusted us to bring her both.

When she left, she was replaced by a smart and capable new executive who wanted to get to the point of having data-driven decisions. That’s all well and good, but I noticed over and over again that because she was in an executive position that had too much to do and not enough time to do it, she only looked at the data and didn’t take into account the people and their stories. She never got that intersection of data with anecdote, and went off data alone.

But the data was still pretty sh!tty, and decisions made off of sh!tty data aren’t strategically good decisions.

It caused a lot of problems. Different business partners, such as the Union, got completely disenfranchised, because they knew the data was erroneous and it was clear to them that this executive wasn’t taking into account their realities.

The intersection of data and story wasn’t there, and it eroded trust in decision making and negotiation.

So remember: 99.27% of all statistics are made up, including this one. If you put that in terms of data — you can make the numbers do whatever you want them to do if you know how to persuasively tell a story around them.

I encounter enough people using numbers to simply fit their agenda to know that’s not healthy in the long run for an organization.

We want to get to a point where we can make data-informed decisions. We can look at the data, assess data quality problems and figure out how to clean up those problems, and take everyone’s story into account.

Making decisions only on data doesn’t take your people’s stories into account, and those stories matter.

How one person views the company is going to be different from another person, for good reason — they’re both focused on a different, specific part of it. Those are both important points of view.

You want to be able to take the data and the stories, and make a decision based on both of them.

Sometimes the data is very obviously telling the truth. Sometimes it’s lying to you.

Once we know the data is clean, we can mesh people’s stories with it based on how they fit into the company and where their story lies, so we can truly get a full picture.

In short, without the story, your data could be leading you astray.

If you don’t have the data to make decisions (or don’t understand the stories behind the data), talk to us about coming in to help you navigate that.

If your data isn’t backing up what you’re hearing from your people or vice versa, that’s in our wheelhouse. We get to the bottom of things by identifying what needs to be cleaned up and fixing the pipes the data flows through, but we also form relationships with people at your company.

With the story and the data, we give C-level executives the true information they need to understand what’s going on holistically and make good strategic decisions.