The data dilemma
Data aggregation can be a great tool – when it’s not misused
Data-driven decision-making has been the rage in business for some time now. The collection of data based on key performance indicators is used to justify decision-making that drives the formation and execution of business strategy.
Data aggregation can be crucial with tasks as basic as answering difficult questions to more sophisticated functions, such as developing and testing hypotheses and formulating theories. Further benefits of having vital information available include risk evaluation, resource allocation, program and policy assessment, and performance measurement.
The use of data is seen as a more efficient means of implementing these activities than would be the case in relying on intuition, hunches and observation alone.
It is hard to argue against using data to run a business. McKinsey reports that data-driven organizations are 23 times more likely to attract customers, six times more likely to retain those customers, and 19 times more likely to be profitable.
It is not difficult to find examples of how data-driven decision-making has led to business success.
Anmol Sachdeva, an independent marketing consultant, has researched several.
For instance, Red Roof Inn positions its hotels near airports. The company figured out how flight cancellation data and weather reports could be combined to increase their bookings. Netflix compiles user data concerning watch time, location and programming preferences to predict which shows will become big hits. Coca-Cola leverages social media data to determine who mentions or posts pictures of their products. With this data, personalized and targeted advertising has led to a four-time increase in clickthrough rates.
In short, data collection has become the proverbial game-changer for business. By helping organizations pinpoint the factors that better address challenges and boost productivity and profits, data and its astute analysis is now an essential component of business success.
However, despite the advantages of focused data, there can come a point in which the zeal to collect information can become extreme and intrusive, particularly for employees. Of course, it is reasonable to expect that management would want data to make improvements in workforce productivity.
Performance metrics can be used to spot shortcomings, training needs and specifics for employee performance evaluations. An organization that leans toward a results-only performance model for their employees need objective data more than a manager’s potentially skewed or biased interpretation of how employees discharge their duties.
Quantification can be misused if it is used to go beyond the reasons stated above. There are now too many documented instances of employees being excessively monitored such that the workplace has become a surveillance culture. A career cannot thrive in a context where someone is always looking over your shoulder.
Questionable monitoring may be the result of management wanting to identify organizing threats such as unionization communications. Or maybe the surveillance is used to spot ways of automating tasks so as to reduce the workforce.
In extreme cases, data may be applied to limit wage growth, exploit labor or even discriminate.
Amazon may be the poster child for such data fanaticism. Brishen Rogers, an associate professor at Temple University’s Beasley School of Law, notes how in 2020 Amazon sought to hire two “intelligence analysts” who were to use data analytics and other means to find “labor organizing threats” from among the Amazon workforce. The company goes on to insist its outsourced delivery providers hand over geolocations, speed and movement of drivers to use however the company wants. Inordinate corporate surveillance has also been chronicled at Uber, Lyft, Tesla and Apple.
Inappropriate use of data results in loss of privacy, greater stress and increased pressure on workers. The workplace can become a place of distrust and fear, not an environment conducive to innovation, high morale and career enhancement. Instead, let’s insist that data collection be ethically construed, transparent and legally justifiable.
Bill Ryan writes about career, employment and economic topics from his home in North Sutton.