It's the Data, Stupid

The Great Recession is hopefully now behind us, but its effects will be with us for eternity. That's because the recession fundamentally changed how people think about the world, in two ways.

First, it focused a harsh spotlight on the quality of decision-making in the modern enterprise. Second, and probably more significantly, it called into question the legitimacy of the leaders making those decisions. Martin Wolf, associate editor at the Financial Times, summed up the whole tragic scenario when he said that most people "no longer believe that [executives] know what they are doing."

The only way we can win back the trust of those we would lead, those who would buy from us and those who would invest in us is to become data-based leaders. Organizations that do not embrace the realities of big data, employ the services of data scientists and banish data-challenged CEOs will fail, and fail quickly.

An important potential first step on the path to resuscitating trust in leadership is to ascertain where your CEO stands vis-à-vis data-based leadership. I was very surprised to discover on the blog of Ben Horowitz, who with Marc Andreessen is co-founder and general partner of the venture capital firm Andreessen Horowitz, the following evaluation of CEO decision-making:

"Every decision that a CEO makes is based on incomplete information. In fact, at the time of the decision, the CEO will generally have less than 10% of the information typically present in the ensuing Harvard Business School case study."

As a student of management, I will be the first to agree that it is a rare occurrence for a decision to be made with full certainty and 100% of the information required. But I differ violently with Horowitz when he celebrates the courage of CEOs who make decisions under circumstances of 90% ignorance. That is not leadership. That is sloth. These are CEOs who are too lazy or too self-reverential to do the hard work required to gather the data that would inform a prudent decision.

Today, making decisions without data is inexcusable, if not anachronistic -- it's inconsistent with realities of the present day or the big-data future toward which we are hurtling. Reid Hoffman, the executive chairman and co-founder of LinkedIn and a partner at venture capital firm Greylock Partners, told the tribal elders of Silicon Valley that he believes the next big thing -- the real meat in the hype sandwich called Web 3.0 -- will be data.

My research supports Hoffman's forecast. Post-Great Recession, I have been going door to door in the nation's C-suites seeking to assemble a composite take on enterprise decision-making. Several environmental truths have emerged. And Truth No. 1 is that sometime between Bernie Madoff going to jail and the U.S. government bailing out the banks, the world rediscovered data. The world is awash in data. Everyone is a data user and creator. Everyone emits a trail of digital exhaust that is machine-readable and algorithmically analyzable.

But not everyone is a data scientist. And every organization needs one.

While data has been exploding around us, another, less-commented-upon phenomenon has occurred: A select group of professionals skilled in obtaining, scrubbing, exploring, modeling and interpreting data has set up shop in high-performance organizations. These are data scientists, creating high-value products from the raw data that constitutes the digital world we live in.

And the CEOs who deserve to lead are creating a space in the enterprise for them.

Thornton A. Mayis the author of The New Know: Innovation Powered by Analytics and executive director of the IT Leadership Academy at Florida State College at Jacksonville. You can contact him at

Copyright © 2011 IDG Communications, Inc.

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