The Key To Diagnosing & Fixing Data Analysis Paralysis

A lot of companies struggle with turning information into action. Most of the time, we blame inaction on not having sufficient information, and I’d say that some of the time, that’s accurate. But a surprising amount of the time, the opposite is the case. We have so much information buzzing around our organization that we can hardly breathe.

When I was in college, I had a professor who claimed that circuit boards ran on the smoke that was contained within the various chips, capacitors, and other gizmos on the board. How did he know this?

“Because when you let the smoke out, the computer stops working,” he said. The smoke, he claimed, needed electricity to do all of its thinking and computing, but if you put too much electricity into a circuit, it would force the smoke out and kill the computer. “You need some electricity, but more isn’t always better,” was the key lesson.

And somehow that was hilarious to me, because of course, I am a complete dork.

I think that our jobs are pretty similar when it comes to data, information, analysis, etc. To function, we need a specific amount of flow, a “current” of information to think on and react to. Too little and our decisions aren’t powered. Too much and we let the smoke out.

Today, many businesses who think they are operating with too little current are actually victims of analysis paralysis. The number of tools they are using, the various data sources, the multitude of specialists, the tsunami of research and the heavy and unavoidable opinions of senior management are all choking productivity and progress in your company to a lifeless state.

We believe that one more piece of data will prove our theory. Or one more Forrester research piece will cover our asses in a risky decision. But the best form of risk mitigation is — and will always be — inaction. Something many businesses have gotten very good at.

What You Can Do About Analysis Paralysis

Start with some very simple data and ask yourself, “Does what I have in front of me help me directly address a shortcoming in how we serve our customers, or a segment of them?” Often you’ll find that the simpler the data (conversion rate by keyword, or traffic source, for example), the clearer you’ll be able to see a performance gap.

If you can answer that question, add a little more data. Ask the same question. Pick some other sources, and ask again. What you’re looking for in this process is the right amount of information, where the marginal cost of doing more research is still far exceeded by the marginal benefit you’re building a case for 80/20 people. But set a deadline. Give yourself just one week to build your case. Pretend you’re getting ready for a big court trial. The judge isn’t going to move the trial date. You need to be ready in one week. Then it’s game time.

If you can more clearly see a performance gap when looking at one very small bite of the information your organization consumes than you can on an average Wednesday, you may really have an analysis paralysis issue, and it’s equally likely you’re an organization that “publishes” ideas, rather than testing them.

While changing this mentality will be tough, it’s 2011 and it’s time to use the Internet for its strengths. It’s going to be a long road, but you will have a much better company, and much better results when you break this habit.

The data you create with your actions will be infinitely more valuable than the publicly-available data you use in your planning phase. The only way to tell if an orange or green call to action is better is to push past the research phase and into the action phase. Put ideas out there. Try new things. And I don’t just mean button colors. Find ways to delight your audience across all of their intents, even if they’re not conversion-oriented.

Keep the flow of information going, but the right amount that keeps the machine running. Don’t let the smoke out by trying to jam too much information through your organization, because your organization will shut down, if it hasn’t already.

Unlike the circuits, you can put the smoke back into your company. Want to swap some ideas about how to handle your case? Let’s talk on twitter!