I have spent a fair amount of blogspace this year discussing how good business decisions need more than information. That the evolution of Business Intelligence tools need to extend beyond crosstabs, charts, scorecards and dashboards to collect and share social intelligence. However, this does not mean that decisions should be made without information, it means that information is the absolute but mandatory minimum for a good decisions. More than that, I would argue that we have an obligation to our customers and our workforce to base our decisions about them on good, solid data.
Informed and Fair
Take consumer credit for example. In the 1920’s and 1930’s it is unlikely that you or I would get credit. Credit was awarded to businessmen. And I mean men. The decision to offer credit would be based on criteria that we would find objectionable today like race and gender. Curiously, according to Larry E Rosenberger, John Nash and Ann Graham authors of ‘The Deciding Factor’, the decision would also be based on factors that included ‘punctuality’ and highly subjective assessments of ‘honesty’. Few of us could argue that a system which assesses an individuals eligibility for credit based their previous repayment behaviour, their income and their employment history not only represents good business but fair business too. Sure, it’s not perfect. In the 1980’s I found it difficult to get a mortgage in spite of being a well paid independent IT specialist with as predictable an income as any of my peers that were ‘permanently’ employed. At the time, I might have argued that ‘it was a pain’ but a little additional dialogue and process and it was sorted. Compare this with the brick walls of the 1920’s built around the subjective prejudice of a few controlling individuals and I would conclude that we have made a step, even a leap forwards.
Informed and Innovative
Informed decisions can be the basis of innovation too. Take, for example, the Swedish Company Klarna. Klarna make it possible to shop on-line and pay only after you have received your goods. They are providing a service which means that consumers can shop on-line but can see and feel their goods before they pay for them. In order to do this, they pay the store and take on the credit risk and they can only do this by efficiently analysing mountains of data that assess creditworthiness.
Informed but Rounded
Organisational decisions do need more than hard data. They need to be openly debated, controlled and they need to be informed by tacit, hard-to-communicate knowledge as well as analytics. However, information is the first step in taking organisations closer to unbiased, objective and therefore fairer decisions.