In this day and age, we have access to an unprecedented amount of data. Strangely enough, we fail to make better choices based on that data. This phenomenon is known as the data paradox. How does this happen, and what can you do to better leverage data?
There are various underlying causes behind this phenomenon. Let me highlight three:
1. Data overload
One of the main reasons is that employees simply become overwhelmed by the quantity and complexity of data. Without thorough analysis and interpretation, data remains uncharted territory. Additionally, data is often fragmented and scattered across different systems, making it challenging for employees to extract insights from it.
2. Lack of expertise
This brings me to a second cause, a lack of data expertise. Analyzing and interpreting data requires specific skills and knowledge. Data without context can be misleading and lead to incorrect interpretations, just like inaccurate or outdated data. Therefore, data analysts play a crucial role in transforming raw data into actionable insights and supporting decision-making based on those insights.
3. Gut feeling
Even if your organization possesses the necessary data expertise, many decisions can still be made based on gut feelings. After all, we are naturally inclined to rely on our intuition, experience, and personal beliefs. Hierarchy can also play a role. So, encourage a data-driven culture that motivates employees to harness the power of data above their gut feelings.
Base your choices on facts
Decision-makers in FMCG companies still heavily rely on point 3, gut feeling. One pitfall is that innovation teams tend to ‘fall in love’ with their own product.
Moreover, we need to critically assess the way data is collected through market research. In many studies, consumers' opinions are solicited, even though they often do not predict consumer behavior.
It's not without reason that 80% of all innovations in FMCG fail. Therefore, base your choices on facts instead of consumer opinions. Read how one of our clients, Tetra Pak, put this into practice.
