The concept of “big data” got a lot of press this past year. So much so that I’ve worried whether the small to mid-size organizations with which I work – organizations ill-equipped to tackle anything but the sparest of data analysis – would be even more disadvantaged going forward.
Not that I understand what “big data” is, how you get it or then use it. But if so many smart folks think big data is a big deal, then it must be. Right?
Maybe not, or at least not for every organization. That’s the thesis of an article in the December 2013 issue of Harvard Business Review titled “You May Not Need Big Data After All.”
If you heard a loud sigh of relief emanating from south central Pennsylvania at year-end, it was me. I was thrilled to find research telling us that most organizations don’t need to chase big data. The challenge for the rank file organization is to use more effectively the little data at hand.
As authors Ross, Beath, and Quaadgrass state, “. . . most companies don’t do a good job with the information they already have. They don’t know how to manage it, analyze it in ways that enhance their understanding, and then make changes in response to new insights.”
I’ve sung from the same hymn book for years in my work with boards of faith-based nonprofits. It’s my contention that when it comes to data, as with most everything else in life, if organizational leaders aren’t faithful with little, they probably shouldn’t be trusted with much. Until an organization “learns how to use data and analysis to support its operating decisions, it will not be in a position to benefit from big data.”
I urge you to read the HBR article for yourself. It’s well worth the cost of a download or a trip to the library. Until then, consider the following four practices for making the most of the data you have.
MORE WITH LESS DATA STRATEGIES
According to the HBR piece, “companies with a culture of evidence-based decision-making share a commitment to four practices.
They establish one undisputed source of performance data. This one would be a major sea-change for the majority of nonprofits. Even in the smallest of organizations, I find multiple definitions of what constitutes success. In most places, most of the time, everyone does pretty much what’s good in their own eyes and woe to the one who suggests a more objective standard.
In contrast, the exemplary organizations cited by the HBR authors “insist on using performance data from just one authorized source. . . Universal acceptance of one source of truth is the first step in adopting a culture of evidence-based decision-making.”
They give decision makers at all levels near-real time feedback. Here’s another irony in how small to mid-size nonprofits function. Despite working within spitting range of one another, program staff complain that they receive almost no feedback from supervisors. Grapevine information flows fast and free, but honest-to-goodness feedback is scarce.
In contrast, within exemplary organizations staff are provided with data about their own performance and the results of the decisions with which they were a part. And it comes often, sometimes daily and always weekly. In these organizations, leaders watch the data and use it to help employees shine.
They consciously articulate their business rules and regularly update them in response to the facts. This is another gaping hole for most nonprofits. In the few places where CEOs have been able to produce an operating manual when I ask, the documents are invariably years out of date and seldom referenced. More often than not, when a change or update is made, it’s in response to a crisis and has nothing to do with operational facts.
In contrast, leaders in exemplary organizations understand that “little data can have a big effect on performance when managers use the data . . . to continually assess and improve the business rules that govern their operations.”
They provide high-quality coaching to employees who make decisions on a regular basis. I know the drill on this one – what nonprofit has the funds to pay for coaching of any kind for employees, let alone on how to use data? My response: look to the board. Chances are good there’s a member or two at the table with experience in evidence-based decision-making. Put them to work and I promise, you’ll have a more engaged board member as well as better performing staff.
I suspect that “big data” will continue as the darling of organizational theorists for years to come, but the good news is that little data used well is just right for most nonprofits. Learning to use data well is no small thing, but the results of doing so can be huge.
Sounds like a great resolution for 2014.
This is a good review. My concern is that the level of technical expertise in many organizations makes it a challenge to achieve even this level of commitment to the use of data in decision making. For example, how do you decide what that undisputed source of data will be? Even being able to articulate what the source will be leaves the challenge of how to effectively gather and present it. This kind of use of information can be critical for success. Critical enough that it may be worth some help from an external source who knows how to take the raw data, collate it, compare it to your goals and present it effectively and in real time to your decision makers.
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