7 Data Myths Every Executive Should Know

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Big data analytics visualization technology with scientist analyzing information structure on screen with machine learning to extract strategical prediction for business, finance, internet of things
Big data analytics visualization technology with scientist analyzing information structure on screen with machine learning to extract strategical prediction for business, finance, internet of things

Sometime in the last 100 years, Edwards Deming uttered a quote that will be used constantly when talking about data: “In God we trust. All others must bring data.” Companies and executives use it to justify why their companies should keep investing in data. People use it to argue against opinions stated without any evidence to back them.  

I think Edwards Deming had the right intention with his statement, but the essence has been lost in today’s world. Data is important, but it’s not the most important thing for a company to focus on. Data is a lever that can make other things easier, not the end goal in itself.  

Our data-driven world has swung too far to one end of the pendulum, and we need to correct it. I want to bust 7 myths that companies can’t seem to let go of when it comes to data. 

Myth #1: Data is the most important resource 

The Economist dedicated an entire issue to describing how data is the new oil. It was, of course, talking about companies like Google and Facebook who have turned data into multi-billion-dollar empires. For most companies, these aren’t role models. Almost everyone else is more about creating great products/services and delivering those to happy customers. 

Data can help, but it’s not your product. For Google and Facebook, data is their product. They want to capture as much as possible and then sell it through advertising. For other companies, data is merely meant to help support decisions. Strive to build data-supported cultures, not data-driven ones. Give yourself room to make decisions without data; it won’t be the end of the world. 

Myth #2: Collecting data is the hardest problem 

After years of technology evolution, data collection is, in fact, the easiest challenge for companies. Everyone is drowning in data, and the onslaught isn’t stopping. Knowing about your customers is easier than ever. This is why the conversation has shifted from “How do I collect more data?” to “How do I store it and access it rapidly?”  

Conferences now focus more on data warehouse, data lakes, and anything that could help companies obtain more insights from their ever-increasing pile of data points. The ease of collection has made other problems worse: we can’t process data fast enough, we get easily overwhelmed, and we can’t separate the truth from the noise. 

In your company, but the focus should be on how many insights you’re regularly learning. Whether those insights come from billions of data points or a handful, it doesn’t matter. How is your data helping you change your behavior? 

Myth #3: Everyone wants to be data-driven 

There’s an idea that everyone wants to be data-driven. Just give them the ability to make their own reports and dashboards, and everything else will take care of itself. In my experience, this has not been the case though perhaps I operate in a different world. 

I come across many people who aren’t comfortable with basic statistics, probabilities, and numbers in general. It reminds them too much of math class back in school, and they don’t want to revisit those times. Some people want to have the insights and not have to show their work to the teacher. 

Your company should be planning for all these use cases. Make it easy for people to export data into CSV and other raw formats and make it easy for people to get insights without running complex formulas. Data democratization is about reducing the barriers for people to interact with the data, but nothing says that everyone needs to become a math whiz. 

Myth #4: Machine learning is the future for all companies 

There’s a lot to be said about machine learning and the world of AI. For starters, the world isn’t as new as we think. We have been working on AI since the 1950s, and even then, we were apparently only 10 years away from self-driving cars.  

The world of machine learning did go through a significant shift in the last 20 years as cloud computing became accessible at scale. The real use cases are hiding behind all the hype that follows whenever anyone talks about AI. Generally speaking, anything to do with pattern recognition, fraud, and analysis is a good challenge for machine learning. 

Focus on how these use cases will help you achieve strategic goals. Why go through all the effort of creating models if they aren’t going to help with revenue, market position, reputation, or something else that’s tangible? Save your research energy for problems worth tackling. 

Myth #5: Technology is the trickiest part of any data strategy 

Most of the prospects who reach out to me come because of specific technical questions. Should we use vendor X? What if vendor Y doesn’t work for us? I understand their frustrations. There are hundreds of options in any given category, and they’re all quite similar. Making the wrong choice seems like a huge waste of time and resources. 

However, don’t confuse volume with priority. Sorting through vendors can be tricky, but it’s also the last step in any data strategy. Start by figuring out your people’s role with data and how you will convert data into insights (process). Then, you can see what role technology can play in helping you with the first two items. 

Going through this process actually makes technology selection easier because it narrows down space. The choices left will match your company’s unique makeup and approach. 

Myth #6: Facts are clear, and everyone can see that 

“Show them the facts” seems to be the rallying point during the COVID-19 pandemic. Look at the case numbers and you will see everything you need to know. As it turns out, everyone interprets facts differently, and the same happens within companies. I’ve been in board meetings where facts are presented, and executives extract different lessons than expected. 

Any fact will go through a psychological filter based on our experiences, biases, and desires. Your data strategy should take into account how the human components change how facts are perceived. Don’t assume that everything is black and white. 

Myth #7: Opinions without facts aren’t welcome here  

I respectfully disagree with Edwards Deming. I don’t think you can discount opinions that don’t have as much evidence behind them. If an executive with 30 years of industry experience suggests an idea, are you going to dismiss it because of poor evidence? Isn’t his/her experience the data? 

There’s a pushback against things like intuition and gut feeling, but I think they play a role in how we make decisions. In fact, I think one of the biggest benefits of data is our ability to train our intuition. Ensure that your company can allow opinions, or you will lose a big chunk of experience and “hidden data.”  

Data is playing a huge role in how companies innovate. Continue to invest on it but do it delicately. Don’t get caught up in the hype and try to put the wrong expectations on the data. Remember that data is just one part of how we make decisions, and it’s not the end-all for most companies. Perhaps it’s time for us to increase our trust in ourselves and our opinions.  

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