Data, Anecdotes, and Data-Driven Decision Making

By Geoffrey Moore

Author – The Infinite Staircase: What the Universe Tells Us About Life, Ethics, and Mortality

I ran across the following quote in a recent review: “The plural of anecdote is not data.” I almost laughed out loud as my mind confessed, “Guilty as charged, Your Honor.” My whole career has been based on converting anecdotes into decision-making frameworks. I have never conducted a research study in my life (although I have been given access to many very fine ones commissioned by my clients). I am a story guy. Narrative is my lifeblood. And being Irish by heritage, I have never wanted a fact to get in the way of a good story. So, my bad.

Data-driven decision-making has the explicit intent of overcoming the parochial nature of anecdotal decision making, particularly when those anecdotes are embedded in Hippos (Highest Paid Person’s Opinions). The whole point of analytics is to correct for such narratives. It is Daniel Kahneman’s System 2 correcting for the enthusiasms of System 1, as described in his book Thinking, Fast and Slow. And it makes total sense. 

So, imagine my surprise when I learn that in fact the original aphorism said just the opposite! Here is the “anecdote” behind that fact, narrated by the man himself, Ray Wolfinger:

“I said ‘The plural of anecdote is data’ sometime in the 1969-70 academic year while teaching a graduate seminar at Stanford. The occasion was a student’s dismissal of a simple factual statement–by another student or me–as a mere anecdote. The quotation was my rejoinder."

This also strikes me as true. When we hear the same story from many different people, at some point we simply take its point as “given” (which is what data means in Latin).  To be fair, a scientist would say it is preliminary data that still needs to be tested and verified through some explicitly data-validating procedure. But in the world of business, where there is rarely enough time to conduct a study before you have to make a big decision, sifting through a collection of anecdotes is often your best recourse.

So, now what? What does all this say for our drive to become more data-driven in our business decision-making? In a word, Prepare! Data-driven decision-making only works when the data is ready to hand when the decision needs to be made. That means data development has to be designed in advance into every part of the operating model we want to be data governed. For most of my career, this simply was not possible—way too much overhead for way too little return. But that is no longer the case. We now have the ability to collect, analyze, alert, engage, learn, refine, and optimize virtually any process in any sector of our economy at an unprecedented scale and at a fraction of the cost we had previously envisioned. Start-up after start-up has proven that this is possible. All that is holding established enterprises back, if we are really being honest, is habit, inertia, and unfamiliarity with the disciplines involved.

Of course, we cannot instrument everything everywhere all at once. So, just advocating for data-driven decision-making is sort of like advocating for climate change—a lot of talk with little accountable action. Instead, we must target a point of departure, a focal point for accountable action, a specific domain that is big enough to matter, small enough to conquer, and able to deliver material returns for our enterprise as a whole. Every enterprise has these domains. They are not secret, nor are they hard to discover. They are lying in plain sight because we have always assumed they could not be changed. But today every enterprise has access to the tools that can instrument these processes, be that by leveraging internal talent or reaching out to third parties. All that remains is for executive teams to surface the slate of worthy candidates, debate their merits, prioritize them in rank order, and commit to the number one priority. In so doing we will be positioning the important ahead of the urgent, which, if we are being honest with ourselves, is the primary function of an executive team, but sadly one which is often neglected in the flurry of other work.

That’s what I think. What do you think?

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