In a world where everyone has virtually unlimited information at their fingertips, we are living in the most data-driven society ever imagined. Whether it be through an online price calculator, or comparing products side-by-side on Amazon, or just looking up facts on Google, people consult data to answer seemingly every question. And why not? Instant access to loads of data makes decision-making easy—or does it?
Its ready availability has resulted in a certain need and expectation for people to use data—and, conversely, a certain disdain for decisions or choices made without it. Many people consider it illogical and unwise to base a decision on anything other than clear, hard fact. Yet in all aspects of life, including organization design strategy, we routinely see people making purely emotional, intuitive, or technically irrational decisions, even when the data might suggest something else—and the interesting thing is, sometimes these decisions prove to be sound.
The Logic of Illogic
We have all at different times stood in a store aisle holding, say, a can of beans. You hold the brand name in one hand and the store brand in the other, and peruse the labels. Your logical mind tells you they’re exactly the same. It’s quite possible they were made in the same factory, on the same line, at the same time, using the same batch of beans. The store brand is 30 cents less. Which one do you choose?
If you’re like many of us, you will still go with the brand name. Why? There’s no logical reason for it, other than perhaps a perceptual need for status. Or, you may interpret the greater attention to branding as an indication of a better quality product. Either way, there’s a certain illogic from which we all, at one point or another, make decisions—whether it be in the grocery store or elsewhere.
Is the decision to pay 30 cents more for a can of beans a good decision? The answer is, it depends. It might not be for some individuals. But for others, perhaps there is more at stake than that one piece of data would indicate. Perhaps the incremental sense of heightened self-esteem or other positive emotion that a person might gain each time he or she chooses a certain brand over another adds up over time to create a significant difference in the way that person carries himself or interacts in the world.
Data-Driven Organization Design Strategy Is A Great Start
There is certainly a need for data and information in organization design and strategy. No one can argue against the fact that access to good data is a powerful tool. However, I’ve observed over the years that no matter how much data you have for certain choices (such as determining the right strategy, or the right tradeoffs, or the right organization design or alignment choices, and so forth), many of those choices ultimately boil down to a judgement call.
Of course, it’s necessary for leaders and organizations to seek data. Data can supply terrific insight into competitors, markets, organization capabilities, and performance that cannot be achieved in other ways. But data shouldn’t be allowed to dictate every organization design strategy or decision. There is value in intuition and judgement as well. Many strategic and organization alignment decisions are judgements for which data may inform but doesn’t necessarily dictate. In fact, some of best strategic and organization alignment decisions ever made have flown in the face of data.
For example, a few years back there was a trend in the marketplace for heathier fast foods. Burger chains were changing up their menus in favor of smaller portions, less fat, and heathier options. All the data supported these changes, but one chain made a decision that bucked the trend. They decided to take absolutely the opposite approach: bigger portions, classic burgers-fries-and-shakes menu items, etc.
This company made a judgement call that there was still a sizeable niche of people out there who craved something big and unhealthy. Their gamble paid off. For them, it turned out to be very successful and others have since followed suit. Sometimes, strategic calls are best made using counterintuitive logic that the data doesn’t necessarily support.
Don’t be a Slave to Data
As you look at your own organization, your organization design strategies, and your organization alignment choices, it’s absolutely a good idea to seek data. Seek it and use it, but don’t be a slave to it.
Many times, the data-driven decision, by reducing bias and stripping away politics and self-interest, turns out to be the best decision—but not always. Be sure to also use your best judgement and experience and that of your team to weigh the pros and cons of the different choices in front of you, and be willing to make choices that may be counterintuitive or even fly in the face of data when the need arises.