Last Updated Jan 18, 2011 8:41 PM EST
(8 minutes 19) We run businesses based on two key ingredients --- information and decisions. Normally we use one to feed the other. Often we use the information to reassure ourselves that a decision is the right one.
But there are three inherent risks that we always need to be aware of. First, the information might not be complete. Dicken Doe gives the example of supermarket thresholds. You assume people will travel the shortest distance to shop, but that doesn't apply in Wales where the cultural bond is strongest with local people who live in the same valley. So when you look at the available data, is it really creating the full picture you need to reach an accurate conclusion?
This issue can be amplified by the use of performance metrics within the business. Mark Crowe from the Australian Marketing Institute gives the example of how advertising is often placed in media that can offer the best measurement. It doesn't mean you get the best results, it just means its easier to see what you are getting.
Secondly, there's the quality of the data you're using. Increasingly, companies are using online surveys or snapshot opinion polls to find quick answers to questions. Ian Woollcott says this is a worrying trend. He says people speak with forked-tongue, and this one-dimensional approach does little to help us understand consumer behaviour. Instead, he suggests, we need more discussion about the fundamental issues and encourage participants, such as customers, to become involved in arriving at the conclusion.
And that leads to the third issue. Information is misinterpreted generally because there isn't enough discussion around the issue. If you want to avoid bad decision-making, make sure enough people are available to frame the issue and interrogate available data. You'll need to have someone who is able to ensure that the approach they take is holistic, so you avoid heading down a rabbit warren and come out with an incremental conclusion that misses the big issue or opportunity.
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