Consider this situation…
The entire sales and marketing team, as well as the CEO, receive an email from a sales manager detailing a conversation with a key customer. The email contains critical feedback on a newly implemented sales promotion program. If the customer’s feedback is implemented, it would result in a major change in how the sales program is being executed and impact the daily routines of several key personnel.
Within a few minutes of the email being received, a flurry of replies start flying back and forth among the recipients debating the merits and demerits of the customer feed-back. Fangs are bared, people on both sides of the sales and marketing divide throw their (virtual) punches and the discussion degenerates into a free-for-all. At the end, the CEO who is also the HiPPO (Highest Paid Person in the Office) gets the final say on the decision. End of discussion.
Sounds familiar?
What we just described is the business world exemplification of the “N of One” study, where the findings of a sample size of one are considered to be representative of the entire population. In the field of medicine, “N of one” studies are a type of clinical drug trials, when one patient is the subject of an entire clinical study. These type of clinical trials are uncommon and deployed in special circumstances such as rare diseases, caused by genetic mutations where individualized treatments needs to be developed.
“N of One” Syndrome in Strategic Decision Making
When the “N of one” syndrome crosses over to the world of business, decision makers base strategic decisions on insights or knowledge emanating from a single source or data point. When this occurs, decision makers miss the opportunity to inject diversity and rigor into the data points, observations, intelligence or insights that are used as the input for strategic decisions. In most cases, the strategic decision based on the “N of One” will likely not be as effective as envisaged.
So why do decision makers fall in the trap of “N of One” syndrome? There are three major causes –
1) Reactive Approach
Companies that base decisions on past or current data or intelligence are in a perpetual fire-fighting mode. They have no foresight on how market events will impact their business and feel the need to respond to every market inflection or observation. They constantly change tactics and strategies in response to their environmental cues.
2) HiPPO Mindset
If the company’s decision making culture is to fall in line with the Highest Paid Person in the Office (HiPPO), strategic decisions will not be vigorously analyzed or debated with internal stakeholders. If the HiPPO leans toward making “gut” decisions or base it on past experience, there is a high probability that certain decisions will be based on the “N of One” category.
3) Information and Communication Silos
These silos are created when the data or information that is collected is not communicated to all relevant stakeholders, nor is it linked with other preexisting data or knowledge streams. These silos increase the chances of strategic decisions being made without the input of all relevant stakeholders or to be based on incomplete or irrelevant data or information.
Key Take-Away
In the immortal words of William Edward Demings, renowned statistician and management consultant –
“In God we trust, all others bring data.”