Data-driven De­ci­sion Mak­ing: Clos­ing the Skills Gap

Rotman Management Magazine - - FACULTY FOCUS - In­ter­view by Karen Christensen

Dig­i­tal plat­forms and tools con­tinue to trans­form daily op­er­a­tions within firms. Talk a bit about the chal­lenges this is cre­at­ing for man­agers.

Th­ese new tech­nolo­gies re­quire an­a­lyt­i­cal tools and frame­works, fa­mil­iar­ity with data, and an abil­ity to put data, mar­ket re­quire­ments, and firm strat­egy to­gether to form in­sights. For most peo­ple, this is very new; and it’s also new for the peo­ple they work with and man­age. As a re­sult, there is a huge skills gap at many dif­fer­ent lev­els within firms.

Go­ing from data to a man­age­rial in­sight is ac­tu­ally quite com­plex. Data is messy, the world it rep­re­sents is com­plex, and both train­ing and ef­fort are nec­es­sary to ar­rive at sound in­ter­pre­ta­tions. The prob­lem is that many man­agers avoid com­plex­ity, al­most in­stinc­tively: they’re busy, they have in­for­ma­tion over­load, and they want to keep things sim­ple. I have a lot of sym­pa­thy for that. Sim­ple truths can be very pow­er­ful, and it can often be time- and cost-ef­fi­cient to fo­cus on sim­ple ex­pla­na­tions and de­ci­sion-rules. Un­for­tu­nately, though, com­plex­ity is only in­creas­ing, and it must be grap­pled with. This takes time, in­vest­ment in both hir­ing and re­tool­ing tal­ented work­ers, and im­por­tant changes in how daily de­ci­sions are made within firms. Un­for­tu­nately, this is gen­er­at­ing a lot of anx­i­ety and in­se­cu­rity — which can make peo­ple re­sis­tant to change.

This comes as no sur­prise. In Trust in Num­bers, Theodore Porter takes a philo­soph­i­cal and so­ci­o­log­i­cal look at the role of data in so­ci­ety, not­ing an in­ter­est­ing in­ter­ac­tion be­tween data and author­ity: when ac­cess to ob­jec­tive data is lim­ited, we rely on peo­ples’ se­nior­ity and ex­pe­ri­ence to de­ter­mine and jus­tify what needs to get done. Sud­denly hav­ing reams of ob­jec­tive data can un­der­mine the power of high-sta­tus peo­ple and cre­ate con­flict in or­ga­ni­za­tions. It also places heavy bur­dens on the data-users and an­a­lysts to be ac­cu­rate and to com­mu­ni­cate ef­fec­tively. Be­com­ing data-driven is not some­thing that hap­pens overnight.

When the skills gap is closed and ev­ery­thing else comes to­gether, what does a ‘data-driven or­ga­ni­za­tion’ look like?

The es­sen­tial con­sid­er­a­tion for every or­ga­ni­za­tion is to make sure that the data they are col­lect­ing ac­tu­ally ad­dress the core chal­lenges they are try­ing to solve. Firm strat­egy and ob­jec­tives should drive the en­tire process: from data

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