If you are wondering how the Big Data revolution is changing business, listen to the findings of a recent Forrester Research report:
“Businesses are drowning in data, but starving for insights. Worse, they have no systematic way to consistently turn data into action.”
I would agree. I’ve failed to meet any business leaders who say they are satisfied with their data-driven investments. Companies allocate enormous sums to analytics—software, personnel, digital tracking, and the like. Data analysis has become a time trap, taking precious energy away from the other core needs. Yet, like lemmings, we can’t seem to stop gathering more and more information.
The obsession with Big Data isn’t going anywhere. Numbers are the chief way that we produce order these days. And they can be the easiest way to depress creative thinking in an organization. While the 1% demonstrate their prowess with data-driven analytics, the remaining 99% feel out of the loop and unable to contribute. Unfortunately, the most creative people are in this bigger pool—the dreamers, storytellers, myth-makers and strategists who say the things that others cannot or will not say.
To stop the bleeding, I want to suggest some ways that information can launch creativity inside your organizations.
In the next few posts, I’ll lay out my case for a very simple proposition: the most successful managers today neither have the time, resources, nor expertise to turn to Big Data for most decisions. Their creative leadership arises instead from taking advantage of “small” clues buried inside their organization. They see patterns in idiosyncrasies, they find ways to stretch capacities, and anticipate change before crisis hits.
I call this form of leadership Thinking Small.
In this post, I’ll start with 3 simple ways data can be used to foster creativity (In later posts, I’ll talk about the exact types of data—small and big—that should be gathered by creative leaders).
I’ve lost count of the number of leaders who follow a straightforward, but dangerous formula:
Gather data + Analyze data + Look for patterns = Identify our Mission.
These managers mistakenly think that insights will “reveal themselves” in the oodles of data that pours out of their computers. They believe that gathering more data will help create focus out of chaos, directed action in choppy seas.
They forget to ask a very simple question, “What problem do we solve for our client?”
You actually need very little data to figure out why your customer needs you. In fact, the real problem isn’t lack of data. It is that intelligence in organizations is distributed. Everyone sees the elephant—in this case the organization’s purpose—from a different vantage point. The key is bringing those views together.
But who has time for conversation, retreats, reflection, right? Let’s just call up the analytics group and crunch the data. And, away they go! Managers solicit data-driven reports to figure out customer behavior, firm strengths, company purpose, and so on.
Stop wasting your money. Distributed intelligence means you need to find a social process, not a data-driven solution. The psychologist Mihaly Csikszentmihalyi sums it up nicely in his book, Creativity—Flow and the Psychology of Discovery & Innovation.
“An idea or product that deserves the label ‘creative’ arises from the synergy of many sources and not only from the mind of a single person.”
Distributed intelligence requires leaders to commit to a process of deliberation that collates multiple views. You cannot outsource leadership to your analytics group. Create space inside your company where groups of people can talk candidly about your relationship to customers and clients. Data should not void this conversation.
If facilitated property, this conversation will not produce many answers, but instead a focused set of questions—from which you can start to gather data.
I recently spent a day with ten senior managers of a global luxury apparel brand. One of them sighed despondently when I asked whether her supervisors took seriously her contribution. “I feel like they want me to put a number on every idea,” she sighed. “That’s the only way I get attention.” She lamented the data mining “quants” in the firm who were called on to validate her creative insights. “While I’m waiting for their report, the world has changed.”
Statistics don’t lie, people do. And, people lie their best with numbers!
Our managerial obsession with numbers is based on the faulty view that companies need order to succeed. Numbers are part of the general strategy that managers adopt to disguise their own insecurity and fear of risk-taking. As Jack Welch noted, “Insecure managers create complexity. Frightened, nervous managers use thick, convoluted planning books and busy slides filled with everything they’ve known since childhood. Real leaders don’t need clutter.”
Welch despised order. He went so far as to say, “Willingness to change is a strength, even if it means plunging part of the company into total confusion for a while.”
Or, as my colleague David Stark has shown in his research, successful companies actively resist order. Instead, the best firms excel at continually creating “perplexing situations” that force people to challenge their perspectives and break out of habits.
I encourage leaders to stop fetishizing data-driven approaches to decision-making. A very simple exercise to find creative inspiration in your organization is the following: In groups of ten, ask your teams to answer the following question, “How will we know if our organization is successful?” 7 out of 10 will say something like, “Our share price will rise,” “Our sales volume will increase,” etc. The rest will tell a story about the organization—what the product meant to a client, its special place in the world, a sense of the future, and so on.
Don’t let go of such assets. No number can take the place of their vision. You’ll be grateful for keeping them close, particularly when times are tough.
Many leaders misguidedly gather data to inform a decision and then justify their action with the same data. An example is Yahoo’s decision to rank every employee, on every team, from 1 to 5. They used the data to subsequently measure the effectiveness of their teams. Unfortunately, as the New York Times reported, “Because only so many 4s and 5s could be allotted, talented people no longer wanted to work together; strategic goals were sacrificed, as employees did not want to change projects and leave themselves open to a lower score.”
Yahoo was right to think that ranking employees would create standards in the company. But, they subsequently (and mistakenly) began justifying team composition with the same ranking.
We’re back at No. 2 above. Who says that a “4”or “5” is the most valued member of your company? In some cases, you may want the 1s and the 5s working together—conflict is the mother of innovation, after all. In other instances, you may want all 4s to compete…And so on. How will you know? Well, if you stop the thought process after gathering big data, you never will.
A simple solution is to think backwards. Start with the desired outcome or action and then consider, “How will be know if our action is successful?” In Yahoo’s case, it would have been more useful to ask, “Once we redesign our teams, how will we create a metric to evaluate whether they are productive/efficient/creative?” The data they gather to measure this outcome may have nothing to do with the initial 1-5 ranking they developed.
To recap: we all use data to make decisions. But, let’s not think that more is better. For that matter, the solution is not to be a humanist. The key is to use information smartly. In the next post, I’ll take a closer look at the kinds of data that are at the fingertips of most leaders—and that can be marshaled for creativity with minimal expense.
Sudhir Venkatesh is William B. Ransford Professor in Sociology & the Committee on Global Thought at Columbia University. He advises companies on unlocking “Profitable Creativity” through The Lookinglass Consultancy.