“Computers are useless; they can only give you answers”. Pablo Picasso, 1968
I read an excellent post recently by Martin Lindstrom about corporate indecisiveness. He states that companies get complacent by believing they understand what customers want. How do they know what customers want? Because their information tells them so — through insight they get from mining increasingly large mountains of data. Sounds great if it works, but as Mattel, McDonald’s, Starbucks and others have painfully learned, sound customer guidance that is hiding in plain sight and that should be used strategically by the business is often not acted upon, or this “small data” missed completely.
“Huddled underneath this false security blanket, corporate executives think they have an automatic ear to the ground but, instead, they have slowly drifted away from the heart and soul of the customer.”
I totally agree with the premise, and the examples used are great, but I think something important has been left out of his observation. In my experience, valuable signals that customers regularly send get missed because decision makers in a position to receive them take their sights off these customers. They stop paying attention. Why? Because they’re too busy looking up (the corporate ladder), not out.
It’s been stunning at times to observe — really smart, savvy people with customer-facing roles who devote so much energy to managing up, looking for ways to please the boss or maneuvering for their next position. They become easily distracted from the job at hand, always with one eye out for internal cues rather than both eyes on customer behavior. Curiosity towards customers diminishes, as does the collection of invaluable insight customers freely provide. In the process, this “small” data that should be playing a key part in helping to drive company strategy gets swept aside in favor of crunching a large pile of data. Worse still, the advice given to executives that is squeezed from this data often comes from analytics people who don’t regularly interact with customers.
“The result is that companies have become like captainless ships, navigating by computer weather forecasts but unable to act on local conditions that are just a telescope away.”
The human condition is exceedingly complex. Combined with the sophistication level of technology developed to replace what humans have always done — drive cars, work on assembly lines, conduct market research — the danger of over-dependence on technology is always present. Fortunately, there are some things humans are just more effective at. One is responding to the nuances of how and why we behave certain ways better than a computer can. Companies that get complacent about this notion often learn an expensive lesson.
“Small data seems to be the missing piece of the puzzle of customer understanding, which for a decade has been distorted by correlations of big data that lack deep insights. It is, however, slowly becoming evident that Big Data cannot stand alone but needs a counterbalance to shed light on the elusive reality of customer needs.”
* Martin Lindstrom’s new book, “Small Data– The Tiny Clues that Uncover Huge Trends,” will be released this month.