Too much business intelligence is of poor quality, argues Mallen Baker

We live in the information age, and yet we are confused. We are bombarded by so many bits of data, so many surveys, that we should be making great decisions informed by facts. Obviously, that’s not happening.

Within the world of corporate responsibility, hardly a day passes now without one, two or maybe even three new surveys, research reports, indexes with novel ranking systems – you name it – shouting out for attention.

This is not helping. It’s not helping because there’s too much of it, and too high a percentage of it is of poor quality.

The trouble is that you can’t scan the headlines to pick up the important, useful stuff. Lazy journalism means that appalling research gets just as many headlines as the good stuff.

Kicking Asda

Take, for example, the recent so-called research by UK consumer watchdog Consumer Focus on green supermarkets. It was a blow for Asda/Wal-Mart, which got labelled by newspapers as “the least green supermarket”. Not great for Tesco. It was fine for some others.

Shoppers may well want some guidance on which are the greenest places to shop. But one glance at the methodology section of the full report, and you realise this is not up to the job.

There was no research into the companies’ energy performance, or their success in greening their supply chains, or anything more substantial. There were a few token measures, such as whether the fridges had doors on them or not. And these measures were scored during visits to tiny numbers of stores in one city (Manchester).

According to the report, it was focused on how the companies communicate with customers – although even then some of the measures didn’t make sense. But that wasn’t what the press release said: “Our league table names greenest supermarkets.” And it therefore wasn’t what the subsequent press coverage said.

It’s in the lead for my Most Shameful Pseudo-Report of the Year at present. Perhaps you would like to nominate some of your own. Sadly, there are plenty to choose from.

So the truth is that you can take none of these conclusions on trust. You have to look for yourself at the detail to try to work out what is valid and robust, and what is just noise. And that takes time – time that generally we don’t have.

Our brains are bombarded every second by something like three million bits of data through all of our senses recording every aspect of our surroundings. But we can only process, at the most, 20 or 30 bits of that data at a time.

A question of focus

So we focus. We ignore all the data we don’t want and we focus on the bits we do. If we didn’t, we couldn’t make sense of the world.

Managers wanting to make sense out of the changing expectations that the world has on their business need to do the same.

My advice is to ignore most of the noise generated by the corporate responsibility community. There’s some good stuff out there, and you may come to know which sources you trust over time, but at the start it takes too long to sort out the noise from the signal.

I would focus on getting real insight on three issues.

First, how the world is going to change over the coming 10 to 30 years, and how this may affect your marketplace.

Second, how your most important stakeholders – those who want your business to succeed, or those whose lives are affected by you – think, and how their relationship with you may change in the light of what you see coming across the horizon in the first point above.

And, third, what are the unseen consequences of your current activity on the natural environment and on vulnerable people?

Real insight

Nobody’s going to do a quick survey to tell you any of these. They are the points that, if you have real insight rather than just a stream of meaningless data, will help you to make better decisions.

People forget that this is what it’s about. All the data, the stakeholder consultations, the benchmarking: it’s to put the makers of decisions in contact with the consequences of those decisions – so you make better ones.

Everything else is just noise.

Mallen Baker is founder of Business Respect.
mallen.baker@businessrespect.net
www.businessrespect.net