Take the best business decision with data stories
Is the fine line between data driven decision making and analysis paralysis unavoidable?
Revenue Optimization — Viewpoint by Scott Dahl
In economics, one of the most well-known concepts is the Law of diminishing returns. What the law states is: As an investment in a particular area increases, the rate of profit from that investment, after a certain point, will decrease. Translated in Data analysis, one does not need to have 100% of the information to make the right decision.
The business world is, by definition, uncertain, and striving to have all the data at hand will slow down decision-making. Conversely, not having any information will lead to no decision or a bad one.
As in all things, the answer lies somewhere in between. A good-enough level that provides the right context and the right data points arranged and connected in the form of a data story or a narrative. This data story should achieve two goals: 1. Help the consumer of information form even better questions for the topic at hand and 2. Improve the confidence level of the decision-maker to go in a specific direction, or 3. Open up new options.
We, Humans, are hardwired to respond well to storytelling, and the way we should approach analytics as a consumer is to balance the end number that the analytics spit out with the data story (The journey to get to the end result)
In hospitality, indeed we tend to overly focus on having all the information at hand or having 100% accurate information. While we should always strive for accuracy (quality) when it comes to quantity, 80% of the information should be good enough to make a confident decision!