Peter Stanford’s interesting recent article, “Charities should not obsess over data” in Third Sector raises some important issues that charity trustees and senior management should be thinking about. That’s not to say I agree with his all his comments about the usefulness of data to the not-for-profit sector.
Peter’s underlying message is that data should be used in conjunction with human intuition and I agree with that. Applying balance in any organisation is becoming more and more important.
It is also undoubtedly correct, as he says, that trustees should set their strategy first and then use relevant data to help them achieve their objectives and overcome their chief operating challenges.
However, there are some specific comments in his article that I must take issue with.
He says that data “tends to tell you the bloomin’ obvious”. This misses two critical points. Firstly, too many organisations either don’t use data at all or worse they use the wrong data. This leads to bad decision making that could easily have been avoided.
Secondly, good analysis of data will enable trustees and senior management to see trends that hadn’t been previously considered or noticed and are far from obvious unless the underlying data is analysed and presented in a visual way that everyone can easily understand. For example, an analysis of the demographics of your donor base may give you insights into what segments of your supporters are interested in and how they donate to you. This enables you to tailor your communications to them and provide them with a method of donating that you know they prefer. This is just one example.
I also disagree that data can only be used to look at what has happened and cannot tell you what people may do in the future. Predictive analytics is becoming increasingly important and is being made possible by the amount of data that can now be cheaply stored, the speed with which it can be accessed, and the analytic tools available to make sense of it. By way of another example, there are often common indicators of when a donor may be about to leave you. If you can identify potentially lost donors before they go, then you may be able to communicate with them to stop that happening.
There is no doubt that gut feeling and human intuition has a place in decision making, and I agree with Peter that intuition and data should be used in tandem. But before placing too much store by intuition, it is useful to be aware that there are many examples and experiments that prove that intuition can be flawed if information is presented to us in a certain way. This is demonstrated by these short tests that take only a few seconds to complete. You may be surprised by the results.