HBR: Time to Temper Your Team's Blind Faith In Big Data

In "Help Your Team Understand What Data Is and Isn’t Good For" Harvard Business ReviewOctober 12, 2018), Joel Shapiro notes the key limitation of "big data": While it can help you understand large-scale trends, demographics, and patterns, it doesn't tell you why those large-scale trends, demographics, and patterns exist. 

For that you'll need to get your hands dirty, and actually deal with people: "The only way to discover the 'why,' says Shapiro, is to engage with them in qualitative research such as interviews, focus groups, and observation." 

But even those methods are limited, Shapiro points out. He gives the example of customers waiting by the side of the road for help when their cars break down. While in the past that annoyance might have turned them off to auto club membership, nowadays they can distract themselves with their phones--and the waiting might not seem like such a big deal. 

Where does that leave the researcher? Notes Shapiro:
  • Start with information that is available quantitatively: the "who" and the "what."
  • Focus on "rigorous testing," meaning that your methods are high-quality, regardless of whether you're number-crunching or moderating a focus group.
  • As you move toward qualitative data, consider using a control group when testing two ideas on a small scale. The experimental group receives an intervention (such as the researcher offering an idea to solve their consumer problem) while the control group receives none. 
  • If possible, try to get a random sample of people to study, for obvious reasons, even for qualitative research. 
Shapiro notes that research can be expensive. It's also somewhat time-consuming. But when you invest in understanding things rather than just acting, you're not just investing in better, more informed planning that is more likely to reward your decisions. You're also demonstrating a commitment to a more reasoned, strategic approach to your business.

That alone is a huge benefit to your decision-making. And when it comes to spending time on "soft" research, your emphasis on high-quality data will help convince the diehard number-crunchers on the team of your leadership in steering the organization in a evenhanded, integrated and ultimately rational manner.

 Copyright 2018 by Dannielle Blumenthal, Ph.D. All opinions are Dr. Blumenthal's own. This content is hereby released into the public domain. Creative Commons photo via Pixabay.