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How To Avoid Myopic Data-Driven Mistakes

Data is not the be all and end all when it comes to defining the parameters of your business' success.

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Data is not the be all and end all when it comes to defining the parameters of your business' success.

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How To Avoid Myopic Data-Driven Mistakes

Data is not the be all and end all when it comes to defining the parameters of your business' success.

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1943 New York City: in a small office at 401 West 118th Street “the most extraordinary group of statisticians ever organised” were handed a new problem by the US government - get more warplanes home.

The Statistical Research Group (SRG) was a classified programme that had assembled the might of American statisticians to help the US war effort – not with weaponry, but with equations.  At its heart was Abraham Wald, who’d fled his native Europe just five years previously.

The US Army Air Force brief was a simple enough: minimise bomber losses to enemy fire. Researchers from the Centre for Naval Analyses (CNA) had conducted extensive studies of the damage done to returning aircraft and had recommended armour be added to the areas that showed the most damage.

But Wald noted a fundamental flaw. The prior analysis only considered the returning aircraft - the bombers that had been shot down were not present for data collection. The holes in the returning aircraft represented areas where the aircraft could take damage and still return home safely. The armour, said Wald, doesn’t go where the bullet holes are - it goes where the bullet holes aren’t.

His work lead to what is now termed survivorship bias – the risk of only looking at the data you have rather than factoring that which you don't. A logical error concentrating on the people or things that "survived", a process inadvertently overlooking those that didn’t due to their lack of visibility.

This isn’t to say that the work that the Center for Naval Analyses (CNA) had done was wrong or wasted, but the analysis of the data set should have been done in a rounded way through a wide-angle lens in order to really “see” what was happening.

The business world has more data at its disposal than at any time previously. This has the potential unleash a workforce’s potential and improve organisational performance. But, as with the US bombers, if organisations look at the wrong things, this wealth of information also has the potential to fuel myopic data-driven mistakes.

phone call

A phone call should never be considered a measure of success

I think it’s fair to say that companies still view the physical workplace as a liability, as opposed to an asset. It’s understandable that CFOs and business heads have always and will always see space utilisation as a cost saving initiative, as opposed to anything else.

However, it’s important to recognise that it can also be a curveball in the pursuit of profitability. If you actively choose to squeeze and sweat a space as much as feasibly possible to achieve the tightest occupational density for the cheapest price, then you’re potentially hindering your employees’ ability to work effectively.

What’s more, businesses haven’t always got it right when it comes to creating the correct metrics to measure success. Fifteen years ago, call centre agent performance was measured on the number of calls made every hour. Employees averaging a higher number of completed calls were essentially considered more valuable than those with a lower call rate.

However, when employers slowly started working out that those bashing out an impressive tally of calls had simply been saying a quick “hello” followed by a quicker “goodbye”, they realised measuring the volume of calls alone was not necessarily the right way to measure output.

Yes, they might be making a hundred calls a day - but what’s the point if the majority resulted in someone slamming down the phone? With the dawn of that realisation came the introduction of first call resolution rates; meaning the employees ability to solve the customer’s problem in a timely and professional manner. That’s the outcome they should have been checking all along. That’s the accurate measure.

We’ve got to start measuring the right things. Or else we’ll become unstuck.

Take Wells Fargo, for instance, recently fined $185 million. Wells’ employees are incentivised to cross-sell products to existing customers and the number of new accounts opened deems the level of success achieved. Due to perhaps a combination of pressure and greed, 5,300 employees opened roughly 1.5 million fake bank accounts without customers’ consent, resulting in the mass accumulation of bogus fees.

Prior to the scandal coming to light, these employees were getting credit for opening new accounts and meeting their sales targets. Nobody bothered to check whether any of the accounts actually had any money inside.

City of London

Setting inappropriate targets can cause weird behaviour

If you implement the wrong measures of success, you’ll end up with the wrong results. With workplace, it’s not about measuring how many people you can fit into a space; it’s about measuring how that space supports the people working within it.

Reducing cost per square foot is the proxy that the corporate real estate world has allowed itself to be measured by. If the measure or proxy were output per square foot, then I believe that the pressure would be to increase productivity. And that's where the conversations would become more interesting.

Until now, fundamental decisions are being made by organisations with little or no evidence of their direct impact on employees. Leesman aims to change that; and that’s why we set up the Leesman Index tool, which measures how workplace design affects work productivity. We’re constantly reminded that Britain’s output levels are abysmal.

Having surveyed over 200,000 employees worldwide, our research suggests the physical work environment impacts employee productivity, not to mention morale and wellbeing. Let’s look at the person. The people. Let’s create workplaces that work. And let’s measure the right things.

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How To Avoid Myopic Data-Driven Mistakes

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