Smart Data Leadership: How can I make better decisions than a chimpanzee?

If we ask chimpanzees questions about world facts, they “know” more than most managers and teachers. Data helps us understand reality better and see trends more positively. How can we help managers make better decisions based on their data?

If you ask people whether the world is getting better or worse, a clear majority will respond: “The world is getting worse.” In his book “FACTFULNESS” (2018), Hans Rosling shows that our world has improved in recent decades. “Our World in Data” and other sources show a similar picture and help us to explore this reality. Rosling bases this finding on important aspects of life such as trends in our life expectancy, income, child mortality and, somewhat ironically, the number of guitars per capita. In impressive illustrations, Rosling shows that the number of people who are forced to live in extreme poverty has halved over the past 20 years. Although this is perhaps the greatest success of our age, few people are aware of this statistic. Just 7% of people give the right answer, while the overwhelming majority believe that poverty is staying the same or growing.

The tragedy is that even politicians, journalists, managers and university lecturers do not achieve better results when they are asked these types of question. As Rosling shows (2013), chimpanzees perform significantly better than well-educated people. While chimpanzees answered 33% of questions correctly when asked three multiple choice questions (logically, a probability of one-third), most people believe that our world has become worse, more hopeless and more violent than it actually is.

Unfortunately this also applies to far too many managers, whose decisions have major impacts. Why do they not make their decisions based on data that they have long since had available to them? Why can they not beat even chimpanzees in simple tests? In numerous companies, this phenomenon drove me to the brink of despair when looking at the impact of these kinds of wrong decision.

Holding managers more accountable in terms of their “Smart Data Leadership” is a long overdue step. It involves requiring managers to do nothing more than open themselves to new, data-driven methods of decision-making that various technologies have offered us for years.

In our research and consulting projects in the School of Business at the HSLU, we help managers and executives to understand and use these technologies better. We show how they can perform better than chimpanzees and, by doing do, steer whole companies in a better direction.

The interesting question is why these kinds of managers (who are often impressive and successful) achieve such poor results where important facts about our business world are concerned. Only actively false knowledge can lead to such poor responses. In other words, there is an “upgrade problem” that stems from outdated knowledge from the time when people went to school. In this respect, universities and continuing education centers have a role to play by developing better teaching methods and materials.

Unfortunately, however, outdated knowledge is not the only reason for poor results, as Rosling also explains. Along with the limited willingness to innovate with regard to new “Smart Data” technologies, our “negative instinct” is also one of the factors responsible for this. This refers to the tendency to perceive negative things more strongly than positive ones. The ice in the Antarctic is melting, children are dying from hunger – and a little virus is wearing all of us out. I painfully experienced this “negative instinct” in my first job as a journalist. In our youthful optimism, we also wanted to write about “good” news, alongside reports of corruption and environmental scandals. Unfortunately, hardly anyone read these stories. The upshot was that we had to respond to the usual ratings pressure and soon switched back to largely negative news stories. Can we hold “the media” responsible for this? Hardly, because they are increasingly acting as merely a sort of “mirror”, reflecting the preferences of society. The more “social” these media are, the more this is the case.

And what can we learn from this?

A positive attitude helps people to lead better lives and helps companies to achieve better results. This is shown by numerous studies that have been carried out by everyone from Martin Seligman to Willibald Ruch, Seligman’s partner at the University of Zurich.

If we can also be open and take advantage of new “Smart Data” technologies (instead of rejecting them out of fear), then better and more sustainable decisions are as good as guaranteed.

Managers in SMEs, groups and organizations are all welcome to approach us and ensure that their future decisions are based more on research and facts. This will not only lead to better business results, it will also make the majority of employees happy in the long term. The end goal is ultimately to improve behavioural patterns. A little virus called Covid-19 has shown us that this is possible. People can do it. The question is whether we can only do it when we have to? We’ll meet again and I look forward to it.

Unfortunately, Connecta cannot be held as planned. Dr. Ingo Gächter would have been one of the 80 speakers. An alternative programme is available through Connecta TV, Doc and Talk – find out more at: www.swisspost.ch/connecta.