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Big Data, Big Risks

By Alan Brew

“Numbers can tell you things you never even knew to ask. 
But they never speak for themselves.”
John Jordan, Penn State University, WSJ, 10/20/13

A sprint through any major airport these days leaves you in no doubt about the latest hot technology trend. A myriad of billboards and banners all proclaim we are living in the era of Big Data.

Big Data is about one thing: How to make sense of oceans of data and extract usable information from it. As connected networks yield up their secrets, B2B companies are testing changes to product mix and brand marketing strategies based on rapid, current and relatively inexpensive data.

It must be very seductive for executives to regard Big Data as the next big thing and assign enormous budgets to it. But, as with any technology, Big Data is not the answer to anything in and of itself. Judgment has to be applied to whatever outcome or direction the data suggests. And here is the inherent danger of relying too much on the numbers: an over-reliance on short-term, numbers-driven answers over the messier quest for better, long-term solutions.

Susan Athey of Stanford’s Graduate School of Business calls this tendency “easy-to-measurism” (Financial Times, December 10, 2013). She is quoted as saying: “You can still make some basic and fairly fundamental mistakes by getting seduced by either the rigor of an experiment that misses some things, or the complexity of a machine-learning algorithm that seems to be doing amazing things, but has some blind spots.”

Consider an engineer confronted with two scenarios — one with a quick pay-off and the other requiring an analysis of the long-term implications for customer behavior that might lead to true innovation. Which one does he present to his boss knowing the pressure he may be under for results?

Sunil Chandra of Google offers a timely reminder: “Our products are used by engineers, even they are built by engineers.” We have seen the damage wrought by engineers when they step into the marketing realm — product names that sound like technical jargon and product design that ignores brand aesthetics.

The same cautionary approach must be applied to data. Executives too beguiled by easy-to-measurism will eventually find themselves on the wrong side of a simple calculation: A bright idea minus long-term user satisfaction equals failure.

Big Data increases certainty, but doesn’t eliminate uncertainty. Judgment still has to be applied.