My previous post cautioned that while becoming data-driven is a laudable goal we should be wary of becoming too driven by data. Especially when we allow our understanding of a complex system to be driven by single metric—and then incentivize performance based on that metric. Chip and Dan Heath called this the focusing illusion. “You don’t live in a one-variable world,” the Heaths explained. “In your complicated, squishy world, if you’re dreaming up an incentive plan, you’re almost certainly in the grips of a focusing illusion. You’re trying to maximize or optimize or minimize something.”
Of course, we do this with the best of intentions. We collect, report, and monitor data to use as key performance metrics for such things as maximizing sales, optimizing use of customer contact data, or minimizing data quality issues. While it is certainly easier to focus our attention on one metric, it ignores other variables in complex equations. More sales might conceal low profit margins or high operating costs. Emailing every customer on every marketing campaign may earn you the reputation as a spammer. And high-quality data unfortunately doesn’t guarantee high-quality business decisions.
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