Lesson 15. Data Driven Leadership

Twentieth-century leadership, like the thousand years of leadership before it, was driven from domain expertise. People were put into positions of leadership because, starting with a relevant education, they had significant experience in that field, leading to a deep intuition.

Thus, if you were the supply chain head for all of BMW, it was because you had run the company’s supply chain operation for one of its divisions (e.g., the Americas), and before that, perhaps a supply chain department for one specific car model.

In other words, you had basically grown up through the ranks of that one specialty. And now you run the supply chain globally because you know which manufacturer can deliver components on time, and which supplier has the highest component reliability—and which suppliers are waiting in the wings if those companies fail.

In the hyper-fast exponential economy, however, those rules have changed. There is little time for gut decisions and leadership based on years of experience. The modern leader needs to be evidentiary. That is, he or she needs to be more data-driven to find the optimal decision, more willing to use the power of technology under the umbrella of a company’s MTP for high-speed Experimentation, and have a perpetually updated domain knowledge that is purpose-, not relationship-driven.

In an increasingly accelerating, globalized, and competitive world, successful leaders will make decisions based on data gathered from all sources possible, ranging from their in-house experiments to customer feedback and the Internet of Things. 

The leader’s mindset will be key.. Specifically, do they have an abundance, exponential, moonshot, and purpose-driven mindset that allows them to react quickly to challenges and opportunities?

For that reason, the most successful leadership will depend upon imagining meaningful experiments, asking deep and useful questions, and then figuring out how and where to get the data to answer those questions. As Peter frequently says, “In the coming future, it’s not what you know, but rather the quality of the questions you ask that will be most important.”

It follows that, in the future, almost all leadership decisions will be data-driven and evidentiary to deal with an increasingly volatile world. We have already seen this with the Internet. A marketing specialist with 20 years of experience find their skills not just useless in this new world, but worse than useless because they’re trying to bring old paradigms to a new gunfight.

So, what does data driven leadership mean in practice?

It means regularly running A/B tests in all of your digital interactions, whether on your website to measure clickthroughs or on your consumer app to measure attention.