5 Pitfalls of Data: Why You Should Bet on Intuition While Strategizing
Worse than building a strategy solely on data can only be crafting one while ignoring data.
In 2020, John Donahoe, then Nike’s CEO, declared ‘data-driven marketing’ a bedrock of his strategy. In 2024, Donahoe was ousted because the strategy failed in epic fashion.
Data can’t lie but can mislead.
From ancient Greek philosophers onward, thinkers have relied on rational, data-based thinking.
René Descartes took this idea to the extreme by saying: "Cogito, ergo sum" — "I think, therefore I am."
Some LinkedIn theorists proclaim that we should base our strategies on ‘solid data.’ However, what seems logical in a university classroom often has nothing to do with real life.
You can’t think clearly without data. But it can only take you so far.
Pitfall 1: There are no ‘facts’ in marketing
In Akira Kurosawa's movie Rashomon, four characters testify in court. They all witnessed the same crime, but each saw it so differently that their stories barely align.
What we call ‘facts’ are often merely partial data biased by our perception.
Any object falls back to the ground when thrown into the air (a fact). It prompted Simon Newcomb, a scientist, to say in 1902: “Flight by machines heavier than air is impractical and insignificant, if not utterly impossible.”
It happened 18 months before the Wright Brothers' flight at Kitty Hawk.
The first iPhone was the most expensive smartphone on the market and didn’t have a keyboard (the facts). It made Steve Balmer, then Microsoft’s CEO, laugh at the phone – and regret his laugh a few years later.
After 25 years as a CEO, board member, and strategy consultant, I know that the same marketing data can lead to totally different conclusions. Where one spots a lucky chance, others may see only threats.
Confirmation bias makes us see only what confirms our views. Naïve realism makes us think we know the world as it is, while others are uninformed or irrational.
“Hard facts” and “solid data” in marketing are mere illusions. We all see reality through different mental lenses.
We all believe the sky is 'blue,' but you don't know what others see when they look up.
Pitfall 2. There are no facts about the future
When Elon Musk bought Tesla, Jeff Bezos launched Amazon, and Hamdi Ulukaya founded Chobani, they didn’t have data to rely on.
Before they introduced their products, Americans didn’t drive EVs, shop online, or eat Greek yogurt.
If LinkedIn sages or René Descartes sat on their boards, they would’ve killed the ideas outright as ‘fantasies.’
Data tells stories only about the past.
For instance, in the 90s, analysts declared the vinyl record market dead and buried for good. Who on Earth back then could have predicted its revival 20 years later? Of course, vinyl is still far from its glory days, but 8% isn’t too little!
Building a strategy on 'firm data' is like predicting the outcome of a presidential election using history textbooks.
Pitfall 3: Most data isn’t all that ‘firm’
It’s easy to manipulate data and numbers. A retail chain where I shop uses different tactics for discounts.
If a product is cheap, like $2–5, discounts are always shown in percentages. "30% off" looks way better than "60 cents off." But if the product costs more than $10, discounts are usually in dollars—"$1 off" on the price tag feels more significant than "10% off."
Before 2005, Americans didn’t eat thick Greek yogurt. Marketers who analyzed the market for Hamdi Ulukaya could present this fact as either a great chance or a bad sign.
Numbers alone mean little; it’s their interpretation that truly matters.
Pitfall 4: Quantitative data is just too... quantitative for the real world
Quantitative data answers “what”, not “why.”
John Donahoe and his team collected tons of data about Nike’s customers through the website and mobile app. They saw what buyers did or didn’t do.
But:
1. They had little data to explain their behavior.
2. The team knew nothing about Nike's non-customers who didn’t use the website or app.
Making decisions on this data is like judging all of humanity by your closest friends.
Pitfall 5: Strategy is about doing what no one has data about
The biggest misconception in strategy is believing you can do what others do and get better results.
You can choose between three strategic options: being efficient, staying ahead, or being unique.
· Being efficient means having the best ROE (Return on Equity) in the market.
· Staying ahead is about offering better products.
· Being unique means being one of a kind.
All three can help you succeed, but only the third ensures long-term success.
A groundbreaking strategy always implies doing something nobody has done before, something you can’t collect data on.
Pro Tips
Scientists stopped viewing intuition as some magical insight decades ago. It is just another way for our brain to process data and connect the dots between facts.
If you can’t control it completely, that doesn’t mean it works less effectively than logic.
Trust your intuition.
Hypothesize.
Test your hypotheses.
Collect data to validate or disprove them.
But remember, that data is unlikely to tell you what to do.
Strategy is an act of creativity, not a product of analysis.
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Great insights. In particular, this one is quite striking: Pitfall 5: Strategy is about doing what no one has data about.
I just published an article today on Substack focused on data-driven decisions. Studies show that people are often overwhelmed by trying to make decisions using data, and I’ve also seen how it’s sometimes used to push specific narratives. Great article!