Our future successes will rely less on data and more on decisive action.
We live in the information age—a period in human history in which data is the gospel and information is touted as the preeminent source of competitive advantage—for individuals and companies alike. In today’s business landscape many observers say the power to harness information is the key to future success. The McKinsey Global Institute has called big data the “next frontier for innovation, competition, and productivity,” while technophiles like Google’s Ray Kurzweil say the basis of advantage in the years ahead is simple: more data, more information, more knowledge.
But, where some see a world of accelerating change, we see the seeds of creative destruction taking hold. To be clear, technological innovation is a big part of our future, and harnessing information will continue to be an important part of every firm’s strategy—but we believe the case for big data and advanced analytics is overstated. Information overload at the individual level leads to distractedness and poor decision-making. At a corporate level, we end up with a bias toward rational, scientific evidence at the expense of intuition or gut feel. These pathologies have a deleterious effect, lessening the quality and speed of decision-making. What’s more, as data becomes ever more ubiquitous and search costs trend to zero, the capacity of information to provide any leading edge declines.
To be clear, technological innovation is a big part of our future, and harnessing information will continue to be an important part of every firm’s strategy—but we believe the case for big data and advanced analytics is overstated.