How Big Data can lead you to make worse decisions
Social media and Big Data, the term du jour for the collection of vast troves of information that can instantaneously be synthesized, are supposed to help us make smarter, faster decisions. It seems as if just about every C.E.O. of a global company these days is talking about how Big Data is going to transform their business. But with increasing frequency, it may be leading to flawed, panic-induced conclusions, often by ascribing too much value to a certain data point or by rushing to make a decision because the feedback is available so quickly. This digital river of information is turning normally level-headed decision-makers into hypersensitive, reactive neurotics.
One big danger is in using the canned reports that come with e-mail providers or services like Facebook. These reports may not align with your actual goals and can lead you astray. E-mail programs, for example, usually measure the success of a message by open rate—even though open rate usually isn’t the goal of your message. Facebook’s reports on the likes and shares generated by a link you posted also won’t be of much help if your goal is driving traffic to that link.
Data should inform your decisions and allow you to confirm or disconfirm hypotheses. It shouldn’t make your decisions for you.
Have you ever been led astray by incomplete or poorly-represented data?