Harvard Business Review recently published a Blog titled: How to manage biased people. They argue that senior leaders, employees and even whole company cultures can suffer from cognitive biases. They conclude that if cognitive bias is not managed, specifically in strategic decision making, it can severely undermine company performance. HBR focused on the aspect of how to manage biased people. I thought about how we could solve this by creating what I call a Secure Fact Base for executives.
When I thought about this, I realized that the secure fact base concept is a great example of the very down-to-earth value of Big-data for companies and executives. Big-data is not just about NSA, Google, Twitter, Facebook and technology geeks. Real practical economic value would be created if we could help senior executives and their teams spot potential thought flaws in strategic decion making.
CEO's and their teams are more often than they believe exposed to their own irrational construction of a version of reality that is not fact based. Most executive decisions target the future and very unfortunately, most facts happen before the future. We learned from our own Big-data solutions for executives that we can now create better models and algorithms, by analysing historic facts to create models that predict the future outcome of decisions with a high degree of accuracy and so help spot and correct cognitive bias.
Here is an example of the destructive outcome of cognitive bias in decision making. Clearly, in 2008 a wrong assumption must have been made about productivity, profitability and market circumstances.
However, one of the big problems with big-data is that it is very focused on technology and IT, not executive users. Just consider the typical delay in the delivery of corporate IT projects in relation to the very limited time executives have for their decision making and you understand where we see the opportunity for big-data solutions.
Senior executives need a Secure Fact Base for their decision making. Working with their teams they should be able to discover facts to help them overcome their personal, team or organization's cognitive bias. I believe that providing executives a secure fact base gives Big-data very real economic potential.