The Myth of Data Driven Decision Making

The idea of guiding decisions (business or otherwise) on data sounds so …infallible. Unfortunately, the same data can mean different things to different people. You see, we humans have a tendency to seek data that supports our original point of view. What’s worse, finding contradictory data may actually make us believe in the wrong view EVEN MORE. “Like an underpowered antibiotic, facts could actually make misinformation even stronger” wrote Joe Keohane in How Facts Backfire (The Boston Globe).

Wait. What???

Brendan Nyhan, a political scientist at the University of Michigan, describes this tendency as “backfire”. True, this is research on politics and not on decision making in business... but I, for one, am not going to disregard expert information that indicates that I may be making poor judgments! :^)

In fact (ha!), Scientific American’s 60-Second Mind reports on another study that shows that We Only Trust Experts If They Agree with Us.

Consider this in the context of decision making in the business world. For example, if an employee proposed one strategy and then changed her mind based on new data, wouldn’t that be viewed negatively? Most of the time, the answer is yes—and that’s a problem.

The moral of the story for those of us in the business world? First, be aware of your human flaws and make a conscious effort to be genuinely open to new data and new expert opinion. Second, commend that employee who overcomes her human tendency to (only) validate her point of view and changes her mind!

Fail Your Way to Innovation

If you want to be consistently innovative (either personally or as an organization), you must be willing to fail. In my last post (If You Want to Innovate, Hire a Kindergartener), I noted that one of the keys to success was a willingness to try something, learn, make adjustments, and repeat.

One recent, large-scale example of that is Google Wave which Google just stopped developing.

While Wave was a failure, it was not a failure for Google. I agree with Karim Lakhani's assessment that "Google Wave Decision Shows Strong Innovation Management". Here are the reasons why:

• Google established performance benchmarks and remained committed to them.
  
• Google shut down Wave quickly. Too often, we become emotionally attached or equate a project's success with our own. The result is a tendency to continue wasting time, money, and resources.
  
• Google learned. Elements of the technology will be incorporated into other products. No doubt that Google gained valuable market lessons, too.
  
• Google's willingness to fail--and fail publicly--reinforces its culture of innovation. Senior Vice President Urs Hölzle wrote, "We are proud of the team for the ways in which they have pushed the boundaries of computer science." What top-notch professional wouldn't want to work in an environment like that?
  

As leaders, we must break the mindset of our organizations that failure is necessarily bad. On the contrary, failure done properly (how ironic!) is a strong indicator of your organization's ability to innovate.

If You Want to Innovate, Hire a Kindergartener

CEO's are the exceptional few who lead the world's businesses. One would expect them to be among the elite in terms of intelligence, insight, leadership, and other key attributes. So how is it that kindergarteners regularly outperform CEO's in a test of innovation?

It turns out that the way we are taught to approach some challenges--whether through our experiences in the business world or at business school (the kindergarteners beat MBA students, too)--doesn't achieve the best results. The Marshmallow Challenge is a simple test of teamwork and innovation. According to Tom Wujec, a Fellow at Autodesk, "On virtually every measure of innovation, kindergarteners create taller and more interesting structures."

The key is that people in the business world are trained to find a single "right" plan. They spend virtually all of their time on planning and then attempt to execute that one plan. Kindergarteners, on the other hand, experiment with different solutions from the beginning and revise along the way. This cycle of prototype --> refine --> prototype again is what enables the little kids to beat the CEO's and MBA's.

The lesson for business leaders is to stop rewarding the "perfect" plan and punishing "mistakes". Forethought and planning are still essential--but don't count on those to deliver successful innovation. Encourage experimentation and testing--even if that means "failing". Your teams will learn, revise, and produce better results.

By the way, when Wujec offered a prize worth $10,000 to the winning team, all teams failed to produce a standing structure!

Tom Wujec: Build a tower, build a team

Running Time: 7:22

Leaders Must Be Explicit About Change

In my last post, The Top Ten Keys to Successful Change, I talked about how to make changes successful.  An interesting blog post by Margaret Heffernan in BNET raises an interesting question:  Do people even notice when change is happening?


While the video on change blindness (see below) may not appear to directly correlate to changes within an organization, my observation is that people do not necessarily realize that change is happening--even if they do recognize the personal impact.


As leaders, our job is to make sure that people don't just feel the effects of change.  It's critical to be explicit about change.  Be sure to communicate that change is happening--no matter how obvious that might seem (again, check out the video below).  That will enable people to prepare themselves mentally and emotionally.  Remember:  even change for the better can be difficult for people.

The Top 10 Keys to Successful Change

Change is difficult for people (both individually and as organizations)--even when it's change for the better.  In order to succeed and have longevity, a business must evolve.  That means that a company's employees must change.  After all, you don't want to work for the world's greatest typewriter company.

Here are the top keys to successful change management:

1. Engagement, engagement, engagement.  Identify your stakeholders (there are almost certainly more than you think) and get them involved in the process.  Get input.  Listen.  Surveys are a great mechanism but make sure that you use more personal techniques as well (such as individual and small group meetings).
2. Communicate, communicate, communicate.  Make sure that people understand what's happening, why it's happening, the end state, the goals, and the benefits.  Even if people don't absorb all of the information, make sure that it's available.
3. Have a vision for where you're going and how things will be better when you will arrive.  Think in terms of benefits for the stakeholders.  If people perceive that things will be harder for them, they may not care that the business will improve and they certainly won't care that you'll get a promotion.
4. Have a plan.  Or the skeptics (and there always are some) will skewer you.  How will this change come about?  Provide the tools (processes, tools/systems, etc.) that people will need to be successful after the change.
5. Achieve small wins.  Show progress or people will lose faith.
6. Find and develop advocates.  You can't do it alone.  Find people--especially those who are influential--to be on your side.  (Remember that an organization's leaders are not necessarily those who are in management).
7. Address concerns and resistance directly.  Again, change is difficult for many.  Don't pretend that resistance doesn't exist (it may not be expressed--which is even worse).
8. Have "thick skin".  No matter how hard you work at all of the above, some people will complain and then complain some more.  Listen openly; consider input thoughtfully; but don't give in unless it's the right thing to do.
9. Choose your battles.  Following #8, be prepared to give in on some things that are not that important.  That will give you the ability to win the battles that are essential.
10. Be ridiculously persistent.  It will seem illogical that it's so hard to get things changed.  But that's reality.  You'll encounter obstacles that you didn't consider.  Keep pushing and find a way around them.

Remember that change is a process (not an event), so revisit all of these throughout.

What do you think?  Did I miss any?  What's your #11?

Finally, for inspiration:  "The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself.  Therefore all progress depends on the unreasonable man."  (George Bernard Shaw)  Change is hard--go persist in making the unreasonable the new reality!