Familiarity breeds corner-cutting, with negative consequences.
More often than not we must make business decisions without all the data necessary to ensure the best decision is made. In these situations we must rely on the “best available data” – B.A.D. – and place more hope in the outcome than we might like. Best available data are not just data, but also collective personal experiences, often referred to as “tribal knowledge” of the decision-maker, decision-making team, or entire organization. When a decision must be made with only the best available data, we rely heavily on that tribal knowledge, which is continually updated via day-to-day experiences. But sometimes, when making decisions with the best available data, and all that goes with it, the decisions end up being just plain BAD!
Often the difference between a good decision made with the best available data and a BAD decision made with similar data is how recently any of the data or tribal knowledge has been updated. While having minimal data readily available is one thing, not making the effort to update what little information you do have is very different indeed.
At one point or another we all have had to fill a key position at our companies and have either been approached by or pursued a person we worked with years, if not decades, earlier. The thought is practical; per the best available data, the prospect is a known entity, and we know what the prospect knows. We remember the personality and think they would be a good fit, the proverbial plug-and-play answer to a current need. The best available data say one thing, but how often do such decisions turn out to be just BAD?
What if the information is out of date? What if the person who walks through the door has undergone a personal life-changing experience (e.g., a divorce, health issues, substance abuse), and the toll has made them difficult to work with? Ditto for skill sets. Often people stagnate in their jobs because they stop striving to learn, or the environment they are in erodes their ambition. The result: The person is no longer the one you remember. The best available data might have been accurate, but now are obsolete.
A failure to update the data or to take full advantage of any available and more up-to-date tribal knowledge can be costly for all. Not understanding a prospect’s current status and abilities may lead to a problematic hire that becomes awkward for the recommender, the prospect, and everyone they work with.
Familiarity with a person or issue can lead to corner-cutting with negative consequences.
The same can be true when doing the decidedly un-touchy-feely task of purchasing capital equipment. Often good data are trumped by dated input as to what is needed and why. To wit: a company has been courting a strategic customer for years and is now ready to commit the significant investment in equipment and talent to deliver a new technology or capability to land the account. Talented people review the specifications. Effort is made to identify the equipment to best do the job. Pencils are sharpened; negotiations are set; monies are committed, and new staff is hired, all to do what is necessary to land the account. Regrettably, it took so long for the sales department to finally convince management to go for that account that when they finally did, no one made the effort to confirm whether the technology and capability were still needed.
Goals often change while the team is planning and committing the (limited) resources to accomplish them. Had sales checked with the customer, they may have found the need had been filled, another opportunity had surfaced, and investments in technology and talent could be better deployed elsewhere.
When we assume the need has not changed, the result can be a very bad investment.
Supply base management requires a company maintain the best suppliers to support and handle changing requirements. Progressive companies visit suppliers every so often to discuss current performance and inform of future requirements. Sometimes those conversations become futuristic or represent the first time a customer shares with their supplier their expectations and strategy for the future. Supply chain reviews utilize the best available data, which often includes notes from past meetings with individual suppliers. Based on that data, it can be tempting to make decisions as to which suppliers should be kept, dropped, or given a larger portion of business. The intent is good, and the best available data are used. Before making decisions, however, efforts should be taken to ensure the data remain up to date. How many times are suppliers dropped because they were missing a certification or lacking a capability. Then afterwards it is revealed they had indeed achieved the certification and invested in the capability?
Up-to-date information is critical to using the best available information. If the data are old, or if much time has elapsed since the last data gathering, it is essential efforts be made to check in with longstanding as well as new suppliers to make sure late-breaking actions are understood and noted before a significant change is made to the supply chain.
When old data – or out-of-date tribal knowledge – are referred to as if they were late-breaking facts, it can mean a bad end to a much-needed relationship.
We all make decisions with less-than-optimal information. In those situations we must rely on the best available data in concert with a refreshed review. A quick e-mail, phone call or spot visit to confirm the data – or the data trends – can make the difference between a well-thought-out decision based on the current best available data and one that is disastrously BAD!
imipcb.com); email@example.com. His column appears monthly.is president and CEO of IMI (