The biggest risk of leadership in the information age? Blindly trusting data and ignoring your gut

It was a classic optimization problem: How much of the plane should be armoured?

In came Abraham Wald, a mathematician working at the Statistical Research Group of Columbia University. His first task was to call in data, specifically on the surviving fighters’ bullet holes, which was duly presented to him. On average, the plane’s engine had 1.11 bullet holes per square foot, the fuselage 1.73, fuel system 1.55 and rest of the body 1.8.

The military personnel were convinced that precious armour must be used for the worst hit areas, namely the fuselage and rest of the plane; the engine didn’t seem to be that badly hit. But after one glance at the data, Wald famously declared, “The armour doesn’t go where the bullet holes are. It goes where the bullet holes aren’t: On the engines."

His argument was that the most relevant data was what the numbers had missed: the bullet holes on missing planes, the ones that did not return. After all, planes with fewer engine hits had survived. Thus, he toppled conventional thinking and saved the day for the Allied powers.

Abraham Wald pioneered research on ‘survivorship bias’—the mental shortcut that makes people go by what survives (say, a victor’s version of events), rather than the truth of what happened. And that’s also where data could lead us astray. Often, it offers us a false sense of comfort, making us believe that what statistics show is not just the truth but the complete truth, and this is what’s best used for decision-making.

The advent of Big Data and computational prowess exacerbates this false comfort, for it has become easy to confuse volume with value and the matter with what matters.

Take another example. A whopping 95% of the known universe is dark matter. What we have managed to map, manipulate and project is a mere 5% of it, which could well be construed as an error.

From the galactic to the atomic: An atom is 99.99% empty space, and yet everything tangible seems solid. All our senses—sight, smell, touch, taste and hearing—operate in a very narrow band. Any conclusion drawn from these must be subject to the caveat that it is based on the very same senses —it’s tautological in a way.

All this should remind us of Einstein’s quip, “Not everything that can be counted counts. Not everything that counts can be counted."

In a world where data is ‘the new oil’ and modern means of manipulating data into submission are both pervasive and increasingly affordable, intuition and insight—or weak signals—hold the key to progress. When there’s so much available for so little, the premium rises on calls made by human executives who are supposed to call the shots.

As technologies like artificial intelligence (AI) arise to crunch terabytes of data within seconds, the surest way ahead for us is to hone our imagination and intuition. We must sharpen our ability to take decisions in the absence of data, in the face of inconclusive or dodgy information, and even when all the usual signals are contrary to what our gut says.

That’s what Wald did when the data was asking for a plane’s worst-hit sections to be armoured. It’s also what Captain Chesley Sullenberger did in 2009 when he landed a 78-tonne Airbus A320 on the Hudson River in New York after a post-takeoff dual engine failure.

It’s your ability to look at weak signals, outliers and Black-Swan possibilities that could shape the course of your career and quality of leadership. If you rely on data, keep in mind that data is democratic; if you have customer data, your competitors would have their own data. All the digital tools available to you are also accessible by others in your organization, not to mention those across the street.

What’s your uniqueness? You. Yes, you are your own differentiator, and must maintain an edge by going beyond data, looking ahead of clever AI tools and being mindful of all that’s subtle, be it ideas or news on the margin.

How to sharpen your abilities to make sense of weak signals?

First, broaden your aperture—read, listen to and engage with experts and laymen from outside your own industry. Perhaps the next breakthrough will emerge at the intersection of domains, so bring that diversity into your view.

Second, push decision-making down (delegate), out (sub-contract) and around (automate what can be), so that you are singularly focused on its most crucial aspects. Captain Sullenberger was gliding the plane while his co-pilot was minding the dials.

Third, stop giving data so much importance, as data is blind. It can be manipulated to suit its owner, and you should be careful not to trust such bits without discretion. You might be an outlier if you do all this, but isn’t that the idea?

Data is not as important as it’s made out to be. “All my best decisions in business and in life have been made with my heart, intuition and guts, not analysis," said Jeff Bezos, founder of Amazon, a mega spender on R&D for automation. This should be convincing enough. So broaden your aperture, be selective about what you trust and don’t fall for today’s data gospel.

The author is a faculty member at IIM Bangalore.