17 Oct

Why More Data Doesn’t Mean Better Problem-Solving

As any manager can tell you, the hardest part of problem-solving isn’t always finding a solution: often, the hardest part is finding the problem. Down and dirty answers to perceived issues are usually ineffective at best; at worst, they can make a bad situation worse.

Problem-Solving in the Information Age

The availability of data in the modern age exacerbates the problem. Business leaders struggle daily with an overabundance of facts that seem to fit the scenario, but in reality may be superficial – connected by coincidence, if actually connected at all – or which tell only part of the story. The sheer weight of information can lead managers to assume that problem-solving complex dilemmas requires nothing more than sifting through collected information on the causes and effects of the issue.

There are holes in this theory, however. For starters, data—even objective data—tends to be static, whereas problems are more likely dynamic, especially when the human element is added in. A single perspective, no matter how well-documented, seldom if ever provides enough background information to accurately analyze a situation.

Which leads to another hole in the “all we need is more data” approach to problem-solving: namely, people are notorious for wearing blinders. It’s human nature: left to our own devices, we either home in on the facts that support what we (consciously or subconsciously) believe the problem to be … or we see where the bulk of the data lies, and focus on the aspects of the problem that best match the facts. Either way, the result is biased, and can point away from an actual solution.

“Facts” and “Truth” Are Not the Same Thing

For a timely example, consider credit card fraud: it’s big news these day, but where does it come from? If we concentrate solely on the most publicized information, it quickly becomes obvious that the lack of secure information—as evidenced by the recent Equifax breach, and countless others—has led to a sharp rise in criminal identity theft. The solution to the problem is equally obvious: online merchants in particular need to crack down on security at the check-out stage.

It’s all obvious. It’s all factual. And it’s also wrong.

Understand: data security is a real and growing concern. The Equifax incident drew considerable attention to the issue. And the rise in stolen personal data has been more or less echoed by a rise in criminal fraud. These are all facts … but they don’t represent the truth.

Because while criminal credit card fraud is real, the truth is that it represents a small percentage of fraud. Financial experts suggest that the bulk of fraudulent credit card chargebacks—as much as 70% or more—is actually perpetrated by existing customers.

What this means is that merchants needing to fight against credit card fraud, basing a solution on the most “obvious” problem wouldn’t solve anything … and in fact, would make the situation worse. For a true solution, one would have to look beyond the obvious, view the problem from all angles, and create a plan that strategically attacks the cause.

Problem-solving as a Leadership Skill

So if, as science philosopher Karl Popper succinctly stated, “All life is problem solving,” it stands to reason that the best problem-solvers are almost by definition the best leaders. These are the ones with the patience and acuity to see problems as they are, who aren’t convinced by “data-for-data’s sake,” and understand that analyzing data is at least as important or more important than collecting it. People who can reach around the most reported aspects and allegedly obvious causes.

Or to view it from the other end, the most effective leaders approach problem-solving as an opportunity, rather than a distraction. They see problem-solving as potential for growth, not merely something to be crossed off a list. True leaders see the totality of what the problem represents, and leverage that knowledge to improve practices and procedures that can lead to growth.