If you already know what you’re going to do…

Meet Bob. Bob owns a small pet supply store and he wants to know how well his TV commercials are working to drive business into his store over other forms of advertising. Bob works to set up elaborate tracking mechanisms using coupons, special codes and training all of his staff to ask and record if customers were first-time or repeat customers and how they heard about his store.

After several weeks of collecting data, Bob spends a ton of time collating and recording the data and running all kinds of analysis on it. The data clearly shows two things: one, the coupons he runs in the Sunday papers are his most effective means of getting customers in the store and are one of the most economical. Two, almost no one comes in due to the TV spots.

Bob loves doing the TV commercials. He feels that they are essential to his brand and he decides to keep doing them…

Why did we bother to run the tracking? Why did we bother to run the numbers? Bob already knew what he wanted to do and wasn’t going to change anything based on what the numbers said.

The data torturer…

Meet Val. Val owns a beauty salon that’s fairly successful. However, she’s fallen in love with some new property on the North side of town. It’s a swanky part of town and the stores in that area all look fabulous. Val believes that her business will benefit tremendously from the move.

She may be right. Val decides to prove it so she does an analysis of her customers from a geographical perspective…that is, where are her customers located? She slices through the data from a proximity to her current location point-of-view as well as demographic break-downs of different neighborhoods that her customers are from. Val’s theory is that her customers are all on the North side of town (where the new property is) anyway and are all up-scale customers.

The first slice through the data shows that Val is only half-right. Her customers are from up-scale neighborhoods, but there are an awful lot of them from the South side of town. Now, rather than blithely ignoring the data like Bob, Val “believes” in numbers, but figures that something must be wrong with her analysis. So she decides to start pruning data points that are “messing up the results” and don’t fit her target market, etc.

She keeps doing this until the results start to tell her what she wants to hear. In other words, she’s torturing the data until it confesses what she wants it to say.

What a colossal waste of time - on both accounts!

Sometimes, you just have to go with your gut

Management gurus and MBA programs everywhere will all tell you the same thing: you can’t manage what you can’t measure. While that’s often true, there are some practical reason why you should ignore this advice. The first is that you should not bother to measure things if you have no intention of changing what you’re doing as a result of the measurements. The other is that if you already know what it is that you want to do, don’t bother measuring and gathering data about it to help support your decision.

Not every decision needs to be made by careful data analysis. A lot of business decisions are made with your gut. There’s nothing wrong with that as long as you understand that’s what you’re doing and are OK with it.

Don’t bother measuring and analyzing data if you’re just going to torture it or ignore it outright. If you’ve already decided what you want to do, then just do it.

Welcome back again!