Data and Strategy

There is an equivalence at many levels between data and strategy. First, the complete absence of data (about competitors, opponents, about opportunities, about one’s own capabilities) absolutely implies a lack of coherent strategy and creates an inability to form any view other than random and blind flailing, which rarely comprises a coherent strategy. Thus, data and information, in general, form a prerequisite for any real strategy. Second, bad data and irrelevant data provide no further assistance and only lead to more blind flailing, or worse, to misdirected flailing. So, good and relevant data are the only types of information that can possibly lead to any form of meaningful strategy.

Not just data

But, I will go further and state that disorganized data and unrefined data lend little to the formation of a useful strategy. If data are disorganized, then there is little hope that the right data or the most appropriate and relevant information are available at the time that such data are needed. This leaves to chance that the information that would help in or lead to the formation of a proper strategy is weighed and used effectively. It is barely different than having no data, at all.

Unrefined data, or data that have not been properly analyzed and digested are also barely better than no information at all. If data are in an unrefined state, then the insights from and the benefits of having those data will arise only by rare chance.

A good store of well organized and carefully analyzed data are a necessary condition for the development of any effective strategy. But, are such data a sufficient condition, as well?

Data are the DNA of business

Here, I am arguing that data form the map on which a strategy is formulated – that data are the milieu in which any strategic thinking is is born and developed. Data are analogous to the DNA of a strategy – the basic building blocks from which any strategic plan is built. Just as any creature (you, or even a cockroach, for example) is the composite of basic DNA building blocks that determine the myriad attributes of the phenotype; a strategy can only by the composite of the data elements upon which it is based. When we say, “You are your DNA,” we know exactly what that means – and we cannot disagree. It implies that you are the composite of your many inherited elements and that in essence, you cannot be anything other than what those basic building blocks have created. A leopard, so to speak, cannot change its spots; nor can you, as a human, someday decide to live as a halibut.

However, just as you are truly more than just your DNA, a strategy is more than just the data on which it is based. As in the “Nature vs. Nurture” arguments of animal and human behavior – so, too, go the arguments of strategy. Upon that framework of your DNA-based existence lies a vast array of experiential effects. The education that you received, your opportunities for growth and learning, perhaps even your childhood diet or even the way that you were treated by your parents – these all contribute to your persona as an adult. They contribute to the overall proclivities and capabilities of the raw framework which we all agree is DNA based, and make us more complex and interesting individuals, some engineers, some artists, some street vagrants and some authors.

Strategy is determined by business DNA

Strategy, too, is build upon a framework of data – but upon that skeletal frame lie a host of modifying experiences and capabilities. Those that construct the strategy bring their own education, their experience, their artistic flair. These “nurture-based” modifications to a strategy allows the resulting strategic plans to be as diverse as our own families are, we will see the equivalents of strategies that seem like university professors and some that seem like street vagrants. The data impose a DNA-like framework for a strategy, the genotype, if you will, and the experience of the designers will move that framework toward various completed forms, the actual living phenotype. The same framework may manifest itself in many different ultimate forms. You will see many different plans emerge from the same basic DNA-like data framework.

What you will never see, however, is a cockroach-like data framework manifest itself as even a street vagrant type of strategy. If the data have the DNA of a cockroach, then only certain types of strategies can result. None of them will resemble, in the least, even the strategy of a toad.

This is a re-cycled post from 2012 – Still relevant!