Perhaps Execs don’t need data literacy after all, just good judgement

Continuing our theme focussing on data literacy education for execs, here is the contrarian perspective. Perhaps there has been too much hype on this topic and it’s not the job of board members to all be data literate. Do they just need broader good judgement and critical thinking?

Here to make the case against the focus that I’ve encouraged is guest blogger, Tony Boobier. As regular readers will recall, Tony is an experienced insurance professional who writes and mentors leaders on analytics and AI. We’ve previously shared reviews of his books on the future of work and how AI will transform Banking.

In keeping with the spirit of this blog, even though I disagree with Tony, it’s good to hear his perspective. So, over to Tony to make the case for less focus on expecting your execs to be data literate…

Is data literacy for execs over-hyped?

One of the zeitgeists of the current data-driven age is that of digital literacy for both executives and companies as a whole. A recent survey by MIT Sloan emphasised the importance of data literacy in the workforce. They describe it as “a stepping stone or a stumbling block when it comes to building a data-driven company”. Elsewhere, Gartner say that “Data literacy is an essential part of a data-driven culture”.

Despite these recommendations, I’m still not sure about the issue of data literacy for Execs. Does an Exec really need to be personally data literate? Isn’t that really a specific job for the Chief Data Officer?

It’s possible to conjure up an image of a data-literate Exec sitting in front of their laptop, poring over rows and columns of data. Hoping to find inspiration or trends on which to make effective management decisions. The reality is that, nowadays, it is seldom like that.

Is the need replaced by effective data visualisations?

Being data literate in the modern world means more than just being able to look at rows and tables of data. Doesn’t an individual need to be a data scientist to be truly data literate?  Nowadays data scientists focus on complex issues such as ‘overfitting’ of algorithms which impact on the accuracy of prediction models. It’s just a guess, but my sense is that ‘overfitting’ (to give one example only) isn’t a topic taught at business schools.

More recently, the improvement of data-driven visualisations has reduced the need for data literacy of Execs. Their role has been increasingly relegated mainly to one of being able to look at, and interpret visual information. Effective visualisation has transformed the need for Execs to check out individual items of data. Now they need to be able to understand what graphs and other types of visualisation are telling them. From this, for them to be able to recognise trends and – equally importantly – what might be the relevance of a trend or pattern in the overall context of the business environment.

We shouldn’t underestimate visualisations. The most effective visualisations can be an item of beauty. In fact there’s even a book having been written on the topic, Information Is Beautiful by David McCandless. Notwithstanding, execs should not be distracted by the attractiveness of a visualisation. If that was the case, then it would be a matter of ‘form’ over ‘substance’. It is the ‘substance’ of the information which is the most important in executive decisioning.

How to avoid drowning in the Big Data ocean

Of course, we shouldn’t overlook the proverbial ‘elephant in the room’, and that is the matter of the sheer quantity of data, a topic made more complicated by its variety. This isn’t the right time or place to provide a lecture on the characteristics of data. But the reality is that complete data literacy in its purest meaning has simply become too difficult. Humans increasingly need systems to help them digest data in its purest form, as opposed to being ‘data literate’ at a personal level.

Visualisations appear to be at least one of the answers. They are the data-literate equivalent of the Executive Summary.

Whilst once, the creation of effective visualisations from data was a skillset in itself, nowadays many analytical companies include automatic visualisation capabilities within their standard toolbox. Increasingly, automation will lead to different visualisations being created for business users based on the same data, but customised for their individual needs.

The pitfalls of execs relying on data visualisations as truth

There are however weaknesses in a visualisation-driven approach to data. The least of these weaknesses is that these visualisations may be prone to misinterpretation. They may fail to place the right degree of emphasis on a particular element. The worst is that the relatively broad-based nature of the visualisation might result in important but minor data elements being missed. For instance, key outliers, or (as we have seen in the case of recent visualisations related to the pandemic), broad-based visualisations failing to provide a degree of granularity which provides true insight.

Isn’t the real skill at executive level that of identifying and understanding the unusual? Making sense not only of outliers but also in being able to interpret matters of detail?

What should be expecting from our executive leaders?

Overall, don’t we need to take a step back and understand what we truly expect from our executives? Employees and all affected stakeholders are entitled to judgement, insight and effective leadership from their executives. These are all virtues which are ultimately more important than data literacy. To exercise these attributes requires more than data literacy. Unless it’s their specific job, as in the case of a CDO, aren’t executives who focus, as individuals, on data literacy just ‘stuck in the weeds’?

Isn’t the true role of the data-literate executive not necessarily to be data literate at a personal level but rather to create and nurture a data-literate organisation?  That’s an organisation which recognises, collects, analyses and acts on data. It’s an organisation which thrives on data-driven actionable insight. To paraphrase MIT Sloan whom I mentioned earlier, at the end of the day it is just a ‘stepping stone’ to success.  

Do you still see a need for data literacy education for executives?

Many thanks to Tony for sharing his concerns and case against data literacy training. I agree about the important role of data visualisation and the risks of careless or unethical data viz design. However, I disagree with his fundamental premise. I see the ability to understand the role of data & think critically about data “evidence” as an essential leadership skill.

As I mentioned in my review of “How Charts Lie” by Alberto Cairo, I also see Graphicacy as a core skills needed by today’s leaders. The need to accurately read data visualisations. To do so with a critical, questioning eye that can avoid being misled. Perhaps that’s a topic I’ll return to, as I agree with Tony that Data Viz is central to how execs should consume data.

But what about you, dear reader? What’s your experience with educating your executives or not doing so? Do you agree with Tony & focus on the data specialists roles instead? Or do you have any challenges for Tony’s position based on your experience? I’d love to hear what approach has worked for you in improving organisational data literacy.