Analytics and data-driven decision making have become major areas of focus for many leaders. In response, leaders are asking for more data and more tools to analyze the data.  Yet, despite the increased attention and increased data, decisions don’t always improve.

Data and analytical tools are important.  However, they aren’t enough on their own.  They aren’t even the most important part of leading with data.  Roger Martin, Dean of the University of Toronto’s Rotman School of Management, summarized the issue in his March, 2011 HBR editorial, “Don’t Get Blinded by the Numbers”

“The huge amount of data…encouraged nearly everyone to believe that a firm’s success was driven by the quantity of its data and the ability to model them…

…More and more we’re coming to see that strategy is as much about interpreting as it is about analyzing.”

Martin’s comment reminds us that it’s not just about the numbers.  In fact, often leaders have the right data, they just don’t interpret them correctly.

The problem is that our brains aren’t designed to be analytical.  That may surprise some people.  After all, the brain is often characterized as a sophisticated computer, more powerful than any currently available technology.  That part is true –  the brain is a phenomenal information processor.  But, that’s not the same as being an analytical engine.  In fact, in many ways the brain has developed shortcuts to avoid expending a lot of resources on analytics.

To understand this, it is important to remember how and when our “modern” brain developed.  The last significant change to the brain and its function occurred about 40,000 years ago.  Life was a bit different then.  People weren’t trying to make sense of click-through rates or customer ‘experience’ metrics.  They certainly weren’t occupied with operating profit, net present value, or shareholder value calculations.  Things were much more simple.  The brain’s primary focus was to foster survival.  Ironically, that still is the focus, but our brains haven’t adapted to differentiate their response to physical threats versus non-physical threats such as your boss, your competitors, or barriers to your business performance.

To keep its owner alive 40,000 ago, the brain got pretty good at recognizing patterns.  It also got good at ignoring peripheral stuff in an attempt to stay focused on the important stuff.  After all, the amount of data we receive every minute of every day is too overwhelming to process consciously.  Therefore, our brains take over the heavy lifting.  The brain constantly monitors the environment making you conscious of those things that need your attention while managing the rest behind the scenes.

Forty thousand years ago, this worked pretty well.  If you saw your buddy get eaten by a big furry animal, your brain would start to overemphasize big furry animals when determining what to bring to your attention.  If that tragic event happened within a week or two, your brain would be especially attuned to it.

However, in our current business environment, the threats are quite different.  New threats surface all of the time.  Overemphasizing past or highly visible events might not help you navigate the future.  As I mentioned in my last post, often what we expect to see, based on past experience or bias, influences the way that we view and interpret data.

For example, when our star performers have less than stellar performance, we don’t always re-adjust our opinion of them.  Rather, we tend to find excuses for their failures that enable us to continue to view them as stars.  Their colleges on the other end of the spectrum, those we believe to be bad performers, receive the opposite treatment.  Their contributions are often downplayed in order to support our contention that they are poor performers.

In his book, The Fifth Discipline, Peter Senge referred to this as the “Ladder of Inference”.  The lowest rung on the ladder is observable data.  All of the other rungs have to do with the distortions created by your brain in its attempts to make sense of that data.  Often, the higher we get on the ladder, our conclusions become further removed from reality.

The bad news is that there is not a lot you can do individually to combat these problems.  The good news is that there is a solution.  Finding meaning in data should be a collaborative effort.  The more eyes, and therefore, experiences, that you put on the data, the more likely you are to get to its real meaning.

Your brain is a miraculous tool for processing information.  But, like any tool, when used for an application for which it wasn’t designed, it doesn’t always perform in an optimal manner.

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Brad Kolar is the President of Kolar Associates, a leadership consulting and workforce productivity consulting firm.  He can be reached at brad.kolar@kolarassociates.com.