Business executives and senior management staff in many companies have been known to create roadblocks to innovation throughout the years. The thoughts and opinions of the average worker often went unheard, as the decisions from the top were all that mattered. Not only did this serve as a constant frustration to hard working employees with truly great ideas, decisions made on the whim of an executive often charted companies off course and into a state of organized disorder.
This top-down way of thinking no longer applies for innovative company leaders that have realized there is a better way to operate. New ways of extracting data, such as A/B testing, has helped executives understand that basing decisions on data is an easy and effective way to get inside the minds of customers and see what they are truly looking for.
The data driven approach to decision making is changing the way many companies are doing business and is eliminating the Hippo syndrome in companies all over the world.
What is the HIPPO Syndrome?
The Hippo Syndrome - highest paid person’s opinion - occurs when senior management vetoes an idea solely on a “gut” feeling, rather than exploring the data and options to see if the idea holds any merit. This can be incredibly frustrating for employees who know the brand and understand what customers want, but are halted by executives who aren’t fully in tune with industry trends and audience personas. Even when presented with data to back their ideas, the Hippo Syndrome often overrules clear statistical evidence.
The Meaning of Data Driven
The data driven approach to decision making is gaining popularity within many companies, as executives are beginning to realize that true market data is easier to collect now than ever before. As the amount of available data continues to increase, business decisions that can be supported with statistics from reliable sources are beginning to hold an increasingly heavy weight.
In fact, a 2011 study from the MIT Center for Digital Business found that companies following a data driven decision making model had 4% higher productivity rates and 6% higher profits. To be effective in this model, companies must ensure the data they use is from a high-quality source, because unreliable information can cause major problems.
How Data is Effecting the Hippo Syndrome
The data driven decision making model is impacting the Hippo Syndrome in a big way. Managers are now realizing that major decisions cannot be made based on the personal preferences of executives, but instead must be derived from a large enough sampling of reliable data. The opinions of top executives still matter, but are no longer the sole factor in important business decisions ranging from product development, to marketing initiatives, to business partnerships.
Allowing the data to make important decisions for companies lets employees have a greater role in the business than what previously existed when the Hippo Syndrome was widespread. In the past, many ideas were immediately struck down simply because an executive didn’t feel the same way, but this is no longer the case. If a professional can use data to show that they have a truly good idea, their voice is now heard, regardless of their ranking in the company hierarchy.