Data overload ‘creates havoc’ for decision making
Huge quantities of information complicate business and leave leaders overwhelmed, a study reveals.
The sheer amount of data faced by business leaders creates havoc when it comes to decision-making and Australia finds it harder than average, according to in a study by Oracle and data scientist Seth Stephens-Davidowitz.
The study found 86 per cent of people thought the volume of data had made their personal and professional lives more complicated, but in Australia the figure was 93 per cent.
While 95 per cent of business leaders recognise the importance of data in making decisions, nine in ten said the growing number of sources had limited the success of their organisations according to the study, which quizzed 14,000 employees and business leaders.
The study also showed 72 per cent of respondents admitted that the overwhelming volume of data had stopped them from making any decision at all.
“Australia understands that data is instrumental to making accurate and reliable decisions. However, today, business leaders and employees are faced with an unprecedented volume of data, leaving many feeling overwhelmed and stripping them of confidence in decision-making,” said Stephen Bovis, regional managing director at Oracle ANZ.
“Australians are famous for our laissez-faire, ‘she’ll be right’ attitude. This study shows that perhaps, this attitude boils down to a lack of confidence in decision-making capabilities with many Aussies choosing to avoid making a decision altogether.”
Business leaders often feel overwhelmed and unqualified when it comes to using data with 72 per cent stating that most of the data available is only truly helpful for IT professionals or data scientists that can interpret and leverage the insights in meaningful ways.
Almost one in three business leaders said they were overwhelmed by analysing data from so many different sources and 30 per cent did not believe they have the analytics background necessary to use their findings effectively.
These challenges are creating a whole new set of problems with 85 per cent of business leaders suffering from decision distress such as regretting, feeling guilty or questioning a decision they made in the past year.
Australian business leaders suffer from decision distress more than any other nation at 95 per cent.
The majority of respondents at 86 per cent said the volume of data has negatively impacted their confidence, making them confused (31 per cent), and leaving them questioning their decisions (46 per cent).
The study also revealed that 78 per cent of business leaders believe they make a decision and then look for data to back it up, while 74 per cent of employees think businesses pull rank, putting the highest-paid person’s opinion ahead of data when making decisions. Around one quarter of respondents feel that most decisions made in business are irrational.
“This study highlights how the overwhelming amount of inputs a person gets in their average day – internet searches, news alerts, unsolicited comments from friends – frequently add up to more information than the brain is configured to handle,” said Mr Stephens-Davidowitz, author of Everybody Lies and Don’t Trust Your Gut.
“People are tempted to throw out the confusing, and sometimes conflicting, data and just do what feels right. But this can be a big mistake. It has been proven over and over again that our instincts can lead us astray and the best decision-making is done with a proper understanding of the relevant data.”
Mr Stephens-Davidowitz said finding a way to get a handle on the stream of data at their fingertips, to help businesses distinguish between the signal and the noise, is a crucial first step.”
Most business leaders feel that analytics tools are failing them with 77 per cent stating that the dashboards and charts they get do not always relate directly to the decisions they need to make.
“Business leaders value the idea of having multiple sources of data, but only if they can be integrated and managed in an efficient way,” the survey stated.
Business leaders stated that managing different data sources has required additional resources to collect all the data made strategic decision making slower, increased costs by forcing them to manage multiple integrations, and if that was not enough, it has introduced more opportunities for error.
“The hesitancy, distrust, and lack of understanding of data shown by this study indicates that many people and organisations need to rethink their approach to data and decision making,” said Mr Bovis.
“What people really need is to be able to connect data to insight to decision to action.”
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