In 2007, Swedish professor Hans Rosling gave a Ted Talk about global development that changed the way many people look at data. His talks, which have now garnered millions of YouTube hits, provide a key lesson for corporate executives: decisions not supported by data can often be wrong.
Rosling starts his talk by presenting the results of a survey that he gave to top Swedish graduate students. The survey asked students to choose the country in a given pairing with the highest child mortality rate. The pairings were Sri Lanka or Turkey, Poland or South Korea, Malaysia or Russia, Pakistan or Vietnam, and Thailand or South Africa. If you are like the top Swedish students, you would have incorrectly answered Sri Lanka, South Korea, Malaysia, Vietnam, and Thailand.
It is easy to make business decisions based on intuition alone; but as the above survey exemplifies, sometimes intuition fails even the smartest and most successful people. Obviously, there were no repercussions for answering Rosling’s questionnaire incorrectly. But what if you were using this same kind of judgment to make a $5 million advertising decision or a $100 million capital expenditure investment? Rosling explains that the problem many people face is not ignorance, but preconceived ideas.
Top executives at any of the Global 2000 companies have incredible business sense, but when making high-stakes decisions, it is necessary to glean actionable insights from the data. And Rosling does this by weaving hundreds of thousands of data points into incredible stories to show how global development is evolving, debunking many myths about how the world actually works.
Just as Rosling turned thousands of lines of data into a meaningful story, corporate executives are beginning to understand how to turn their data warehouses into business insights by testing key initiatives in a subset of their locations. Sometimes these tests confirm previous intuition, but often executives gain new and profit-generating insights.
To provide just one illustrative example, companies have tested profitable network-wide local advertisement programs and found out that only a small percentage of the local markets were contributing to incremental profits, while the other markets were losing money.
Looking at huge amounts of data in innovative ways, just as Rosling does with his global development work, enables individuals to move past preconceived ideas and extract valuable information from their data that will lead to profitable decisions.