Published on the 02/05/2023 | Written by Heather Wright

And stressing out business leaders…

While businesses are increasingly harnessing data to make decisions a new survey shows the paradox of too much data paralysing decision making – and how its causing some business leaders to turn away from data-led decisions to rely on gut instinct, or abandon decision making altogether.

The Decision Dilemma report, from Oracle and Seth Stephens-Davidowitz, author of New York Times best seller Everybody Lies and Don’t Trust Your Gut, surveyed more than 14,000 business leaders globally, including 1,000 in Australia. It puts some figures on something many of us will already know: Too much information stifles decision making.

While the vast majority – 99 percent – want help from data in decision-making, too much is, well, too much, and its causing increasing decision paralysis and impacting business and personal lives as well as the businesses themselves.

And that’s particularly true for Australian respondents, who reported the highest overwhelm across several categories including 82 percent being so overwhelmed by data that they abandon making a decision altogether. Twenty-six percent, meanwhile, say they rely solely on gut feelings, on par with global findings, while 44 percent now only listen to sources they trust.

Australians were also the most likely (93 percent versus 86 percent globally) to say the volume of data is making decisions in both their professional and personal lives much more complicated, with 66 percent saying they face a ‘decision dilemma’ – or not knowing what decision to make – more than once a day.

At the same time, the number of decisions we’re making each day is multiplying. Eighty-eight percent of Australians, and 74 percent of those surveyed globally, say the number of decisions they make each day has increased 10-fold over the last three years.

Australians, long known for their laid-back ‘she’ll be right’ attitude, are also reporting the highest negative impact on their quality of life, at 93 percent, with 40 percent reporting ‘spikes in anxiety’ from the inability to make decisions.

Oracle goes so far as to suggest, perhaps a little tenuously, that the laissez-fair attitude might actually boil down to a lack of confidence in decision-making capabilities resulting in Aussies choosing to avoid making decisions altogether.

While the report paints a picture of the angst suffered by those surveyed, it also highlights the ramifications for the businesses – and it’s not a pretty picture, showing decision distress is causing inertia.

While business leaders want data to help and know it is critical to their organisation’s success, they lack the necessary tools and collecting and interpreting data has pushed them to break point. In fact, 99 percent of Australian business leaders believe the growing number of data sources has limited the success of their organisation.

Additional resources are required to collect all the data from different sources and is actually making strategic decision making slower according to 37 percent of Australian leaders surveyed.

“People are drowning in data,” Stephens-Davidowitz says. “People are tempted to throw out the confusing, and sometimes conflicting, data and just do what feels right. But this can be a big mistake. It has been proven over and over again that our instincts can lead us astray and the best decision-making is done with a proper understanding of the relevant data.

“Finding a way to get a handle on the stream of data at their fingertips, to help businesses distinguish between the signal and the noise, is a crucial first step.”

All those dashboards and charts aren’t helping as much as we might think either, with a whopping 89 percent of Australian business leaders saying they don’t always relate directly to the decisions they need to make. Interestingly, 90 percent say most data available is only truly helpful for IT professionals or data scientists – that’s substantially ahead of the global average of 72 percent.

Yet despite that, Australians, more so than any other country, recognise that without data their decisions would be less accurate (55 percent), less successful (25 percent) and more prone to error (49 percent).

The report highlights how critical it is for data to be relevant to decisions that are being made.

That’s in line with comments from Professor Oded Netzer, vice dean for research at Columbia Business School and a keynote speaker at last year’s Melbourne Business Analytics Conference who has previously highlighted the need for companies to think first about the data needed to solve a particular problem or make a decision.

“Make sure to spend the time analysing the data you need to make the decision as opposed to sifting through the troves of data available to you and the infinite ways to analyse it,” he says.

In his book, Decisions Over Decimals: Striking the Balance between Information and Intuition, he advocates a ‘tool’ dubbed IWIK – I wish I knew.

“To guide the discussion all the way from top leadership ask them: ‘What is it I wish I know in order to make the decision?’”

It’s part, he says of ‘quantitative intuition’ – combining intuition together with information to strike the perfect balance.

But Netzer has also cautioned businesses that the idea that data will remove all uncertainty is a myth.

“Facts are black and white, but decisions are grey,” he says.

“Understanding this, leaders can focus on what humans do very well, which is defining the problem, interrogating the data and synthesising the information to make better decisions.”

Looking for the problems where data exists, rather than looking for data where the problems exist, is also a key issue, he says, noting companies can tend to focus on the most readily available data to define the problem and identify answers, rather than spending the effort to find the right data to address a problem.

He cites the example of marketing teams assessing customer engagement based on less relevant, but observable, metrics such as the number of followers or likes on social media.

And, of course, there’s the technology component in aiding data driven decision making – something Oracle is, naturally, keen to push.

Among the tools are artificial intelligence and machine learning. Across Apac, 85 percent of business leaders say they would prefer a robot or AI to make their decisions – ahead of the global average for business leaders of 70 percent (and 64 percent across all respondents).

Australians, however, seem slightly less keen to have robots making their decisions – just 64 percent of Aussie business leaders said they’d prefer the robot option.

“Australia’s business leaders have a sophisticated view of data with only a few preferring to make decisions based on gut feel alone,” Stephen Bovis, Oracle A/NZ regional managing director, says.

“But while they recognise the value, they do need help in making the data work for them.

“The hesitancy, distrust and lack of understanding of data shown by this study indicates that many people and organisations need to rethink their approach to data and decision making. What people really need is to be able to connect data to insight to decision to action.”