Tuesday, June 5, 2012

6 Principles for Using Data to Make Decisions

Using Data to Make Decisions
If you want to succeed, you must be willing to base your decisions on reality. But work in the knowledge society can be so complex that making the right decision becomes extremely difficult.

In my experience in the world of competitive education, we must be goal-oriented and must be as efficient and effective as possible. But how is this accomplished? How can we ensure that our activity will actually produce the results we desire? I believe that appropriate use of data is the single-most important component to be used in making effective decisions. (And no, I do not mean the fictional Star Trek character Data, though it would be awesome if we could use him to make decisions...).

Below are 6 principles for making effective decisions based on data:
  1. Have goals. What does your organization want to accomplish? These goals should be measurable, something that you can know you have accomplished. They should be concrete enough to align with your organization's mission but should be flexible enough to adapt to the environment in which you operate.
  2. Identify performance measures that indicate (1) progress toward your goals (sometimes called leading indicators), and (2) accomplishment of your goals (lagging indicators). Lagging indicators will likely not change often, for example, the number of persons served, number of students graduating, amount of money made, etc. No matter the purpose of your organization, there are specific goals and these goals must be measurable and measured. How you reach your goals might change, and therefore your leading indicators might change as well.
  3. Automate measurement of performance measures. Decisions are most effective when based on reality, so it is crucial to make the data readily available. This automated measurement can be done through technology or through people, and often it is a combination of both.
  4. Organize the data in meaningful, relevant ways so that they can be interpreted, understood, and linked to our goals and to our decisions. Data is only useful if it appropriately represents important aspects of reality (i.e. your goals) and enables effective decision-making.
  5. Use the data. You can use data to perform several key functions, including (but not limited to) the following actions:
    1. Identify whether you are moving toward and reaching your goals.
    2. Identify where you are having performance issues. These issues can be articulated as performance gaps, meaning the gap between desired performance and actual performance.
    3. Identify what is causing the gap. This data should come from many sources and should be comprehensive in nature. You will often have to gather additional data at this stage to get a real picture of what is happening. This data can be gathered through observation, interviews, focus groups, data mining, existing reports, etc. Be sure to gain data from all relevant sources and triangulate all sources to get a holistic, realistic picture of what is happening.
    4. Identify what can be done to close the gap. This part is usually a pretty easy step because it should be based on the cause of the gap. Again, you may need to gather additional data from the sources identified above.
  6.  Make a decision and implement it based on the results of your data analysis. Again, if you do not base what you do on thoughtfully acquired, thoroughly analyzed data, then you will be much more likely to make poor decisions that could have potentially disastrous consequences.
As I wrote about in a previous post, humans have the tendency to jump to conclusions, to do what seems best based on instinct or previous experience. And while this approach can often be effective, it does not always work. We must be willing to gather and use sound data to make our decisions, or we will be left in the proverbial dust by those who are willing to do the work required to make good decisions.

Principle-Based and Data-based Decision-Making
I want to be clear that I am not advocating an arduous process of data-gathering and analysis every time a decision must be made, which would be rather counter-intuitive. As human beings, we have the capacity to generalize our experiences into principles and best practices, which can guide effective decision-making. Experienced leaders and professionals can often intuitively discern effective decisions based on their experiences in similar prior situations.

Perhaps, then, we might use principles to guide our use of the data. Indeed, our mission, goals, and strategies can be based on principles and values and informed and refined by data. A combination of principle-based and data-based decision-making, therefore, becomes most powerful.

Thinking Systematically
Making decisions based on data aligns with the idea of thinking systematically, and it requires discipline and hard work to focus efforts on the systematic activities that will bring the results we desire. This systematic process can be applied in any setting and should be used when specific results are desired. For examples of how to apply systematic thinking, consider the following previous posts in which I share examples of thinking systematically:
  1. The ADDIE Process (a systematic process for designing effective instruction)
  2. Setting Professional Goals (I describe a systematic process for doing this)
  3. A post describing the ISPI-adopted HPT Model (a systematic process for improving performance in business) 
You will note that these processes all follow the same basic pattern: (1) identify where you are and where you want to be; (2) plan out how to get where you want to be; (3) do your plan; (4) see how well your plan worked; and (5) adjust your plan and keep trying. This process is powerfully effective, and when data guides the decisions made at every step, success becomes much more likely.

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