When Data Displaces Organizational Power: A Perspective on How Decisions Get Made
We all face important decisions every day; the solutions to these questions may depend on just the right balance of data and professional knowledge/experience.
We recently participated in a course titled Evidence-Based Strategy and Decision-Making at the Edwards School of Business. This unique experiential course lead us through seven German-based companies, Kärcher, Eberspächer, AP Sensing, BitifEye, Duale Hochschule Baden-Württemberg Cooperative State University (DHBW), Gemüsering, and Bosch. Before departing Canada, we also met with Vendasta, Federated Co-operatives Limited (FCL), and PotashCorp. We asked these companies how they optimize data to make better decisions.
What Do We Mean by “Data Displacing Organizational Power”?
Traditionally, organizations make decisions based on the knowledge and expertise of their employees. This common practice often occurs because of the experience and seniority that decision makers have in their respective fields. An emerging opportunity with respect to the decision-making process is found in the integration of data throughout the workplace. As we found, many organizations have already begun using data to their advantage.
Across the Canadian and German companies we visited with, we noticed how data displaces power. In many organizations, data is becoming an increasingly useful tool in providing fact and reason for decision-making. As heard from the Vice-President of Growth at Vendasta, “everything [Vendasta] does is data-driven. [Data] helps to support arguments and provide fact on the issues being considered.” (Jacqueline Cook, personal communication, May 2, 2017). This understanding, although not necessarily a ‘traditional’ method of decision-making, is becoming increasingly relevant in industries worldwide. It’s important to note, however, that, “…data’s power does not erase the need for vision or human insight” (McAfee & Brynjolfsson, 2012, p. 8).
The adjustment from power- to data-driven decision-making is not one that can be easily or abruptly made, as we learned from the Director of Strategy and Corporate Development at PotashCorp. PotashCorp has transitioned from what the company referred to as “belief-driven” decisions towards a mix of data- AND belief-driven decision-making (Kelly Freeman, personal communication, May 9, 2017). As important as it is to have evidence backing up decision-making processes, it is equally important to integrate the knowledge, experience, and intuition of employees into this decision-making process. For PotashCorp, analytics now challenges the beliefs of employees, providing justification throughout the decision-making process. This involves a balancing act between data and professional knowledge/experience. Allowing data to drive the decision-making process ensures authenticity is maintained with respect to the organizational goals.
In further support of our observation that data displaces power, we learned how Federated Co-operatives Limited (FCL) houses its own market research department, because it appreciates the authenticity and freedom of conducting its own research and constructing its own data (Vic Huard, personal communication, May 9, 2017). In Germany, Bosch noted the desire to obtain data through its own market research departments and market research initiatives. As Canadians, we are familiar with the emphasis on “German quality”; this emphasis is driven through the care and attention given by German organizations in their market research, product testing, and consumer feedback reports – all enabled by data.
Key Takeaways – How To Begin Maximizing The Benefits Of Data!
In embracing the displacement of power by data, organizational leaders must be willing to welcome and appreciate the data-driven feedback and insight of fellow employees, regardless of their previous experience in the organization or industry.
Find the appropriate balance between relying on experience and relevant data throughout the decision-making process.
The great thing about data is that it’s everywhere – data can be obtained through countless sources.
Regardless of size, organizations don’t necessarily need a fancy research department or an extensive marketing budget to find relevant data that works – remember, employees are some of the finest data sources!
This concept of data displacing power in modern-day organizations presents both challenges, as well as opportunities in the growth and development of thriving business models and corporate culture.
McAfee, A., & Brynjolfsson, E. (2013, October). Big Data: The Management
Revolution. Retrieved May 2017, from Harvard Business Review: https://hbr.org/2012/10/big-data-the-management-revolution
About the Authors:
Austin Friesen and Joshua Grella are both commerce students in their 3rd and 4th years of study, respectively, with the Edwards School of Business, both majoring in Marketing and specializing in Advanced Global Business through the Hanlon Centre for International Business Studies.