Data has been used to evaluate behavior since at least 1749, when the word statistic was coined to mean a “description of the state.” Big data—the extensive use of statistical compilation and analysis—didn’t become possible until computers were sophisticated enough to store and manipulate large amounts of information. Gradually, online retailers began to track and act on information about customer preferences that was uniquely available through the Internet shopping experience.
The reasons for data analytics include predicting any event, from a book purchase to a spacesuit malfunction, detecting how much risk is incurred at any time, and preventing catastrophes large and small. Naturally, big data has been used by technology companies like Google and Facebook, who rely on advertising dollars for revenue and thus need to predict user behavior. Insurance firms predict behavior to assess risks in order to set customer premiums.
While accessibility to data increases organizations’ ability to predict human behavioral trends, the use of big data for understanding, helping, and managing people is relatively new but holds promise. We must keep in mind that big data will always be limited in predicting behavior, curtailing risk, and preventing catastrophes. Management is more than the sum of data.
In dealing with people, leaders often rely on hunches, and sometimes the outcomes are excellent. At other times, human tendencies get in the way. Use evidence as much as possible to inform your intuition and experience. That is the promise of OB.