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The Latest Fad—Data Driven Business Decisions

It’s unfair to call out a trend as a ‘fad,’ so let’s define it. ‘An intense and widely shared enthusiasm for something, especially one that is short-lived and without basis in the object’s qualities.’

Okay, that’ll do until proven otherwise. And understand, at the same time, that I am not against the use of business data—except when it’s used as the primary driver of decision making.

Keep in mind that business is more human than data-driven

With that in mind, the obvious question arises of what happens when the data you pay attention to includes such things as the impact of profit-sharing upon employee satisfaction, keying vacation schedules to family need and tying salary increases to a combination of the inflation rate and employee skills?

What happens, in my judgment, is that a well-run company emerges

But (and there is almost always a but), business journals and business coaches are pretty much infatuated with this ‘new concept’ of tying corporate decisions to the ‘evaluations’ of charts and diagrams. I think that’s a dangerous concept and hope it’s nothing more than a fad that will shortly fade away. There’s just a single letter separating ‘fad’ and ‘fade.’

What, if anything, makes it dangerous is corporate leadership’s tendency to too often justify decisions on numbers alone. It has been said, quite accurately, that statistics will confess to anything if you torture them sufficiently.

Data may drive cattle to market, but employees are not cattle and modern business is not the old West

Just as today’s cowboy rides an 18-wheeler, the modern employee is (or soon will be) a union member, may work from a remote site and knows he or she is likely to work for two or three employers in future. That’s not always a matter of choice in today’s world. Buyouts, consolidations, market conditions and the blazing speed of disruptive technology make it unlikely that your most trusted and competent sales guy or shop foreman will ride the same horse all the way through their business career.

As an owner or CEO, you can foresee most of those events with both a hand on the throttle and a healthy payout. Those who work for you are affected more abstractly, with little chance for either an early warning or much compensation. That translates (in cowboy terms) to riding with only a toe in the stirrups when the ground is unstable, so you don’t go down with the horse.

Job security is a whole different rodeo in today’s business climate

That means letting data primarily drive your business solutions is likely to ramp up turnover, encouraging the brightest and best to leave and the frightened and borderline to stay. That can quickly turn a solid company into a mere shell of its former self.

Not to say data isn’t important

Data is the best indicator of where your business has been and a valuable tool to measure future trends. Without a keen eye on the numbers, what may be coming down the road is anyone’s opinion, and a gamble at best. But its weakness is the inability to measure a human heart—and if that’s too esoteric or millennial for you right now, stay with me for a moment.

The skilled and dedicated employee is rare, but they seldom stick with you for either money or a company car. But they’ll hang in there with you through thick and thin if you’re fair, honest, trustworthy and give a damn about them.

Do you (or your managers) know the circumstances of those people who keep your show on the road? It’s not useful to be nosey, but it’s worth a lot to know what’s going on when your star salesman or shop foreman is in a skid. He may have a sick kid or a shaky marriage and it’s none of your business until it is. Finding out is a skill and that skill is built on trust. Creating that environment depends upon what I call management by walking around. That works best when practiced by the owner/CEO all the way down to whoever runs the secretarial pool.

With friends or family, we stick with those who care about us. Why would it be any different with a company? Think about that. If you’re an owner or CEO, what kind of company would you like to work for?

You won’t find the answer in data.