Everyone is entitled to an opinion, but...

“If we have data, let’s talk about data. If all we have are opinions, let’s go with mine.”

- Jim Barksdale

I'll start this post of continuing the story of Wayne Gretsky. I started it in two recent posts:

Gretsky was great and skating to where the puck was going to be. But, he never explained how he knew where it would be. It’s assumed that he was just very good at reading the play.

Where others saw chaos and unpredictability, he saw data/evidence/patterns/probabilities. He took the information available about the state of play and out-thought everyone else on the pitch.

Don't "just do it"

These days, we have a predisposition to action rather than thought. We’re told to “Just do it”. We're told the most important thing is to do something. Even anything. Because action is better than thought.

But, strategy teaches us that we need thought to choose the right actions. “Fail fast” and “test and learn” are great. But random experiments are at best inefficient. And ill-conceived experiments are even worse.

As Henri Bergson said, you should:

"Think like a man of action, act like a man of thought."

You have to look for evidence

It doesn't take a lot of experience to realise that you will probably never have all the data you want. But we still have to make decisions. And we can't always afford to wait to get more data.

But that is not an excuse for not bothering. My experience is that there is usually a lot more evidence available than people care to acknowledge. It takes a little creativity to find and interpret it. But that effort pays off in spades.

I remember hearing a proposal from the manager of a call centre within a medium-sized business. They weren’t keeping up with the number of incoming calls. He wanted to hire more call handlers.

But I asked him why people were calling in the first place. It turns out he knew exactly how many people were calling but had absolutely no idea what they were calling about. So I went and collected some data.

It turned out that most people were calling about things that the company had messed up. So it seemed obvious to me that they should at least consider that a better solution might be to hire more people or train them better to not mess those things up, rather than simply hiring more people to clean up the mess afterwards. But without having looked at that data, you’d have no way of knowing that.

Finding evidence is not enough, you still have to interpret it

It's equally true that we have a tendency to mis-interpret or over-interpret data the data they do have.

We see what they want to see, and not what is actually in front of them.
We mistake correlation for causation.
We mistake what customers say for how they actually behave.

So its obviously important not just to have the data, but to use it well.

Evidence of the future

Another mistake is thinking that there can be no evidence for the future because it hasn’t happened yet.

But as the famous Science Fiction write William Gibson said:

“The future is already here, it’s just not evenly distributed.”

Consider COVID-19.

Think of all the companies who’ve been experimenting with remote work for years.

Think of all those films and that famous 2015 Ted Talk by Bill Gates. He not only predicted the global pandemic but also described how it would happen in pretty accurately detail.

The conspiracy theorists, of course, have a field day with that. But all he was doing was pulling together the evidence which was readily available to us all.

So, if we weren’t prepared for pandemic it wasn’t because there wasn’t any evidence, but because we hadn’t paid attention and acted on the insight.

Evidence versus intuition

I've heard other people argue that experience and intuition are better guides than evidence.

Don’t get me wrong: Intuition and experience are wonderful things.

But, they tell you:

what data to look for,
how and where to look for it, and
how to avoid misinterpreting it.

Experience and intuition also contain all our biases and failings.

So intuition and experience aren’t a substitute for evidence. They’re a tool for using evidence more effectively.

Hindsight is 20:20

We tend to turn for inspiration to very successful people or businesses. And what we see is what they did. That what’s visible. And I think that may be partly what is behind our current bias towards action.

But what we don’t see is the thought they put into it and the evidence on which they based it.

Or, we see the few who succeeded without using evidence and thought. And forget about the vast majority who simply failed on that basis.

Conclusion

There is another saying about opinions: Opinions are like noses; everyone has one but they think each others' smell. (Although I think the original saying might have referred to a different piece of anatomy.)

Opinions are a weak foundation for business strategy. Evidence is the antidote.

So, as business strategists, we should constantly be asking: What evidence to you have to support your decisions? And what processes do you have in place for re-confirming or adjusting that on an ongoing basis?