Data Driven…or Data Informed?

data slide By bionicteaching on flickrI just finished reading Eric T. Peterson’s post titled The Myth of the “Data-Driven” Business.

I don’t talk or write much about ‘data’…mostly because I’ve always taken it for granted as something that was always ‘there’.   If the data I needed wasn’t available in an easy to consume format, I’ve always found a way to get what I needed through data collection, data manipulation or by hacking together data to get what i needed.

To me, data has always been something that I’ve used to do my job. Data is something that I’ve used to help inform myself, my teams, my organizations and my clients.

I’ve often heard people and companies talk about being ‘data driven’ and have always felt like I was missing something as I never really understood what they meant by being ‘data driven’.

In my world, data has always been the building block of services and platforms but data isn’t driving me, my business or my teams. Data is the base level of the business. Data is the business in its rawest form…but its also meaningless without context  and meaning.

Most of my thinking towards ‘data’ comes from my systems thinking and knowledge management education and training in the form of the Russell Ackoff model. The Ackoff model claims that  there are five ‘buckets’ that content in the human mind can be classified into. These buckets are:

  • Data
  • Information
  • Knowledge
  • Understanding
  • Wisdom

In the systems thinking and knowledge management world, the “Data -> Information -> Knowledge” model is quite prevalent…or maybe more accurately, its been the prevalent filter that i’ve used in my work.

So…from my filter, Data is the rawest level of ‘stuff’. Its the baseline that you build from.  Data leads to information, which leads to knowledge…but data is nothing until you build something on top of it…until you add some form of context or meaning.

Therefore, it was always hard for me to understand the ‘data driven’ people who’ve been popping up everywhere over the last few years.  I’ve never really given much credence to the ‘data driven’ mantra.

So you can imagine my surprise when I saw the The Myth of the “Data-Driven” Business headline in my RSS reader today.

In the article, Peterson makes a fairly convincing plea to stop using the term ‘data driven’…rather, he says, use something more like ‘data informed’.

Eric writes:

My concern arises from the idea that any business of even moderate size and complexity can be truly “driven” by data. I think the right word is “informed” and what we are collectively trying to create is “increasingly data-informed and data-aware businesses and business people” who integrate the wide array of knowledge we can generate about digital consumers into the traditional decisioning process. The end-goal of this integration is more agile, responsive, and intelligent businesses that are better able to compete in a rapidly changing business environment.

Emphasis Mine.

I can get behind ‘data informed’.

I can get behind using data to make better decisions. At the end of the data, thats why you collect data…to make better decisions.  But…you’ve got to put meaning, context and definition around that data to make it useful.

I’m keeping an eye on Eric’s post to see what discussions come out of it but I’d love to hear your thoughts on how you view ‘data driven’ vs ‘data informed’.

Image Credit: data slide By bionicteaching on flickr

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  • shim_marom

    Eric, I have spent most of my professional life dealing withe the provision of management information, starting with MIS, through EIS and in recent years in DW and BI. I never liked the term ‘data driven’ as it raises in my mind the analogy of one taking a boat ride and letting the current determine the final destination. The challange for executives is to define the problem domain first (i.e. ask the question(s)) and only then look at the data to find the answers. Some might suggest that this still qualifies for being called ‘data driven’ but I would argue that with this approach the emphasis is on the question while the answer is a secondary consequential outcome.

    Interestingly enough, and related to your post, I’ve read some time ago an article in the HBR (see in http://blogs.hbr.org/cs/2011/08/success_comes_from_better_data.html) where the author makes the observation that competitive advantage can be gained not just form sifting through mountains of data but through the identification of that data which could provide that advantage.

    So in the context of the above discussion I certainly like the term ‘data informed’ better than ‘data driven’ although, to be honest with you, that term does not yet encapsulate the attitude required to use data successully. I would still be looking for something else, though I can’t quite define what that term should be.

    Cheers, Shim.

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  • http://ericbrown.com/ ericbrown

    @shim_marom I’m still looking for a better term myself, but ‘data informed’ is much better than data driven.

    Data is essential to business, but we shouldn’t put it on a pedestal like some do. Sure its important and sure its necessary…but more important is the ability to use that data to make decisions. Perhaps thats what people mean when they use ‘data driven’ – but it conveys the wrong message to me.

    thanks for the stopping by…and thanks for the HBR link…Jumping over to read that now.

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  • mroden

    Eric,

    I totally agree with and like your term “data-informed.”

    Your article reminds me of a few sability/ user experience quotes about Websites and software that are full of “data,” but useless to the people who need to use them:

    “If you can’t find what you need or understand what you read … it’s useless.”

    -and-

    “If it’s hard to use it will hardly be used.”

    I guess it all comes down to this: people need information to do their work, and if information is not in a palatable form, it’s almost worse than no information at all.

    Martha Roden
    Tech. Writer and Usability Specialist

  • http://ericbrown.com/ ericbrown

    @mroden Hi Martha- Perfect examples….data and information need to be in a format that is understandable,useful and usable. Great stuff. Thanks for the comment. p

  • stephen.gilliss

    Hey Eric, Just discovered this site accidentally and glad I did. This “data-driven” blog immediately caught my attention because, well, I’m an IT PM working for a company that — amongst other things — has productized its data. Anyway, it seems the difference between data-driven and data-informed is semantics, really. You say potato, I say potato. Doesn’t change the fact that they’re both tubes harvested from the ground. Same with data-driven v data-informed. At least that’s how I see it. What’s most important is the philosophy behind the terminology and, as you’ve pointed out, the context in which the data is used or more accurately, ‘interpreted’. Philosophically, it makes sense that a business (or people, for that matter) make decisions based on something. Data is that something. It’s raw and unrefined, but it’s there. And businesses have a lot of it — be it structured or unstructured. Realizing its there somewhere and finding ways to properly collect, extract and interpret it are the bigger challenges. The interpretation or context component is, IMHO, the most critical but also often the most subjective as you and I, having access to the same data, are likely to interpret it differently. And even if we did share the same interpretation, we still might act upon it differently. Of course what we’re collectively touching upon here is Business Intelligence (BI), which was spawned from the birth of computing in the 60’s and coined in ’89 by a Gartner Group analyst. Since the 90’s, BI has grown dramatically. As it applies to project management (PM), BI is of course a critical component of strategic project management. It’s not up to PMs to put BI in place, per se, but it can be a PMs responsibility to help identify, extract data and present data interpretations to decision-makers so they can, well, decide. Such PMs would provide even greater value by helping the decision-makers see which projects and their associated data-interpretations align with the company’s strategic vision. Even better, the PMs would help create tools that the decision-makers could use to vett and prioritize projects presumably by those which will provide the biggest bang for the buck (aka ROI). So it appears I’ve gone down a rat hole, for which I apologize. But I suppose the essence of my rant is that whatever you call it, data are an essential asset for driving business decisions.

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