In today’s “big data” world characterized by large, complex information, predictive analytics, concerns about user privacy, etc., it is more important than ever for executives to develop data literacy, defined simply as the ability to read, work with, analyze, and argue with data. Surprisingly, despite more access than ever to quantitative information, its use has not increased.
So, we asked the question: just because executives CAN use data, does that mean they DO?
To find the answer, we examined executive assessments across various industries and organizations from our own internal database. We analyzed two personality traits, which here refers broadly to an individual’s distinctive set of enduring traits and characteristics that shape their behavior, and reviewed the correlation against two ability variables, referred to here as an individual’s capacity or skill to perform specific tasks or functions effectively based on their knowledge and aptitude:
- Data Rationality: This trait measures how much someone enjoys working with numbers and statistical information. High scorers prefer numbers and data for decision-making, while low scorers rely more on their gut feelings.
- Intuitive or Data-Driven: This trait looks at whether individuals make decisions based on instinct and experience or on available quantitative data. Intuitive decision-makers prefer quick decisions, while data-driven decision-makers take their time to analyze available information.
- Numerical Information Processing: This skill measures the ability to identify patterns and rules in numerical data to predict outcomes. High scorers excel at processing mathematical facts and figures.
- Advanced Numerical Reasoning: This skill assesses the ability to select important numerical
information, break down data into principles, and evaluate the sufficiency of quantitative evidence for accurate conclusions.
So, what did we discover?
Individuals who possess the ability to comprehend and manipulate data tend to utilize it more frequently in their decision-making processes. Through our rigorous analysis, we uncovered statistical correlations that underscored this relationship. Specifically, our research revealed a strong connection between advanced numerical reasoning skills and both data rationality and a preference for data-driven decision-making.
This correlation suggests that individuals with enhanced numerical reasoning abilities are not only more likely to approach data in a rational and logical manner but also lean towards making decisions based on data-driven insights rather than relying solely on their instincts or intuition. This finding highlights the importance of numerical reasoning skills in promoting data-centric decision-making in various contexts.
Simply put, when leaders can interpret and apply data in their decision-making, they usually do.
But, as always, there are no hard and fast rules in human behavior. Here are some important considerations:
- Context matters: Sometimes, quick, intuitive decisions are necessary, especially in fast-paced environments. Seeking quality data does not always bring about quick answers.
- Experience counts: C-Suite executives have a wealth of industry knowledge, and even intuitive decisions often stem from that experience.
- Balance is key: Combining quick decision-makers with more deliberative, data-driven thinkers in your leadership team provides diverse perspectives and skillsets.
What does this mean for your organization?
- Diverse leadership: Encourage diversity in your leadership team, both in characteristics and perspectives. Combining different decision-making styles prevents groupthink and leads to better outcomes.
- Data literacy: Equip your workforce with data literacy skills. Even if they don’t always leverage it, even possessing these skills allows for more thoughtful decisions and better communication around fostering a data-driven culture.
- Assess leaders: Evaluate leaders not only based on their abilities but also on their inclination to use data, especially in roles where data is crucial for success.
Allow BEATTY to assist you in identifying, assessing, and fostering your leadership talent. Connect with us today and experience firsthand why we are the trusted choice for organizations seeking transformative leadership solutions.