Creating a Data-Driven Organization

Chapter 9. Decision Making

In a significant minority of organizations senior management take decisions behind closed doors for opaque reasons and, should those decisions turn out to be the wrong ones, are not held accountable. This is a disturbing state of affairs.

Economist Intelligence Unit¹

There is no mystique about decision-making. It’s a teachable and learnable skill for which almost everyone has potential.

Sydney Finkelstein (ibid.)

Warning: bad joke alert. 

What’s the most data-driven animal? An adder. (Insert groan here.)  

What’s the least data-driven animal? A HiPPO. This is much more serious. HiPPO, “highest paid person’s opinion” (Figure 9-1), a term coined by Avinash Kaushik, is the antithesis of data-drivenness. You all know them. They’re the expert with decades of experience. They don’t care what the data says, especially when it’s wrong, and they are going to stick to their plan because they know best. And, besides, they’re the boss, as the Financial Times explains:²

HiPPOs can be deadly for businesses, because they base their decisions on ill-understood metrics at best, or on pure guesswork. With no intelligent tools to derive meaning from the full spectrum of customer interactions and evaluate the how, when, where and why behind actions, the HiPPO approach can be crippling for businesses.

This chapter covers the link in the analytics value chain that perhaps is least discussed: the decision-making step itself. An organization can have quality, timely, ...