Even with more information available than ever before, companies often struggle to make decisions when too much data causes decision distress.
- When making decisions, leaders often draw predominantly from past experiences rather than the new data before them.
- The current economic conditions have left most business leaders with a fair amount of uncertainty as they face new challenges.
- However, the decision dilemma can play a role in CEOs’ and investors’ risk tolerance which can have even greater effects on the economy, according to software company Oracle.
- In a survey of more than 14,000 people, Oracle studied how overwhelming data negatively affects business leaders’ decision-making abilities.
Why it’s news
Uncertainty can make CEOs and investors cautious, and cautious leaders can have ripple effects throughout the economy. Even with data right in front of them, leaders can sometimes feel trapped by situations they have not encountered before. Data collection needs to change to offer better support to these leaders.
Oracle’s study found that 74% of respondents say the number of decisions they make each day has increased 10 times in just the last three years. As the number of decisions has grown, the amount of data has grown with it. Around 78% of respondents said they have more data from more sources available to them, yet 86% of those surveyed say the volume of data makes their decisions more complicated.
This decision paralysis extends beyond just the inability to make a choice—85% of respondents say that the decision dilemma negatively affects their health and personal well-being by increasing stress, leading to missed opportunities, and ruining their confidence.
Decision dilemma is a pervasive problem in society—59% of respondents admitted to suffering from it every day, and 70% say they have given up on deciding due to being too overwhelmed by data.
Business leaders are not exempt from this problem, in fact, even more leaders, around 85%, suffer from decision distress—regretting or questioning a decision. The increasing amount of data may be the problem, as 91% of leaders say it has made them less successful, and 73% say they do not trust the data and therefore do not make decisions.
Though many leaders struggle to take advantage of the data available, Oracle found that most business leaders believe access to the correct data can help them make better decisions. Harnessing the right data can help them improve employee performance, meet company goals, and prioritize the proper initiatives.
The problem of overwhelming data is so severe that 21% of those surveyed say they are giving up on making decisions through analysis and relying on gut instincts. Survey respondents have made this decision even though 44% know their choices will be less accurate, 27% think they will be less successful, and 39% believe they will have more errors without the data.
For some companies, the answer is decision intelligence, sometimes outsourced to another company. Through these companies, businesses can access new approaches that analyze data and help leaders understand how decisions can be made and improved. These systems are one way leaders can fight the problem of too much data.