simplysam17

Data Driven Decision Making Towards Gaining Competitive Advantage Being an MBA student for the past one and a half years I have learnt that it is extremely important to have a point of view about everything and it is equally important to be able to put forward it in front of people, effectively. But how do we do it? We are able to do it when we have with us substantial arguments to support our point of view. Some might believe that the best decisions are sometimes made based on one’s “gut feeling†but we should not forget that disasters happen more often than not, when due diligence is not done before arriving at a decision. Decisions that are made on the basis of data are easier to carry forward and defend in case of opposition. Also, the person making the decision is more confident of attaining the goal because the decision is supported by a thorough research and analysis. As we gain experience in a job, the decisions are taken increasingly on the basis of experience. We are likely to become more complacent, and expect others to follow whatever they are told. But we must ask a question to ourselves- Is our past experience enough, to enable us, to make decisions in this ever changing business environment? The truth is while we want people to follow us, we have to become good followers first and the interesting part is that we do not have to necessarily follow a person but a thought. A thought can be to always follow some rules before making a decision. Once we fully submit ourselves to these rules, we can become someone who will be readily followed by others. Even if a person feels that there is no need to follow rules due to immense experience and power that one possesses, one should try to substantiate his/her arguments with the help of data because ultimately he/she is working for the growth of the organization which has many stakeholders apart from him/her. Hence, the decisions involving so many people should not be made on pure instincts. Another advantage of Data Driven Decision Making (DDDM) is that it always helps us in deciding the next step in the project that we have undertaken. If we follow instinctive approach decision making then it is quite likely that we will take an instinctive reaction at each and every stage of our assignment. Also, DDDM reduces the surprises that we encounter moving forward when we implement our decisions and thus removes the element of uncertainty that might force us to take unaccounted decisions. It helps you to land up in a familiar territory where we can rely on the data we possess and reduce the chances of committing errors. Data gives us the power to represent and then implement our thoughts and beliefs. In a meeting also, it is always better to have a discussion on the basis of some data rather than an unstructured brainstorming. True, brainstorming helps in finding out unbiased solutions to problems but data gives a direction to the discussion, and ensures that the solutions remain within the framework of being relevant. Information is available everywhere and we must try to gain as much of it as possible, because it is never too much. A learned person commands respect and obedience from one and all. The importance of data is so much that some companies like Bloomberg have made a business out of providing relevant data to companies, and companies that recognize data’s importance do not mind paying the price for acquiring additional knowledge, because they acknowledge the competitive advantage that data will provide while facing their competitors. It is always easier to follow our instincts and make decisions quickly but what is difficult but more logical is to take a more pragmatic approach and invest time in researching about the consequences of different decisions we take. Following a DDDM approach also makes people more accountable as the results of their actions are recorded in a data warehouse and is available for viewing of the manager at any given time. Hence, it is easier to figure out where the bottlenecks are and corrective steps can be initiated. This approach is far more superior to the random unstructured approach of evaluating performance. DDDM brings about an element of transparency in functioning of the company and in turn increases the employee commitment as they know that their work will be recognized because of presence of independent data driven method of performance evaluation. When employees believe that their growth is linked to the company’s growth they work harder to achieve the stated goals. Whenever a company targets another company for an acquisition, it is preceded by a thorough due diligence process wherein the acquiring company studies the finance structure, culture, cash flows, and future synergies among other factors before it makes up its mind to go ahead with the acquisition. It is a fact that one cannot predict the future but what is also true is that we can always prepare for the future, looking at the past. Hence DDDM is a wise approach to proceed because we never know what we may encounter in your journey. The precedents that have been set help us in avoiding the fatal mistakes that have been made in the past. “I know all†approach is not a trait of a good manager and as it is known to all that the day one becomes complacent, he/she is doomed. In conclusion I would say that no decision is right or wrong on the onset, it is the consequences that decide its correctness. But a decision made on back of the supporting data is far more likely to sustain itself in the turbulent times. Note - Visitors shall not be able to comment on this article until they are logged in.