When Analysis Outruns Wisdom: Potential Pitfalls of Data-Driven Decision-Making, by Jonathan H. Westover PhD

Abstract: This article discusses potential pitfalls that can arise from data-driven decision making when not properly balanced with human judgment, strategic thinking, and organizational context. Drawing on the author's experience as a management consultant, key risks are examined such as the "tyranny of metrics" when KPIs distort goals, misinterpreting correlations as causation, overgeneralizing from limited data sets, confirmation bias within "filter bubbles," and overemphasizing quantitative data at the expense of human elements. Specific industry examples are provided to illustrate unintended consequences that have occurred. The article advocates for maintaining a multidisciplinary, questioning approach to analytics, constantly reevaluating metrics and models, supplementing internal data with external realities, and blending quantitative and qualitative inputs. Balancing these risks and enacting various safeguards can maximize the benefits of fact-based management while avoiding potential downsides.