I run a data company, and I’m often asked, when speaking to a new client, what our customers do differently because of the data.
The implication often seems to be:
Before they didn’t have the data, so they were doing one thing.
Now, they have the data, so presumably they’re doing another thing.
Of course, we have plenty of examples of concrete changes that clients have made when they get our data, as in:
A solar home system company learned that a huge proportion of customers were experiencing product defects and poor after-sales support…so the company reinvented after-sales support and addressed the issue, and saw massive improvements in both customer satisfaction and social impact metrics.
But the more nuanced answer is this: the immediate actions companies and funds take, when we get them new data, are largely focused on the biggest, most surprising, or most troubling findings—the headlines.
Beyond that, what the data allow them to do is to ask a new and better set of questions.
The Path from Ignorance to Clarity is Not Flat
Our misconception is that we think we can go directly from ignorance to clarity (the drawing on the left).
In reality, for any topic that matters, as we learn more we embark on a journey. Over time, we will climb a mountain of increased complexity—with new insight, new inquiry, new investigation—until ultimately, after a great deal of focused attention, we begin seeing the world more clearly and, ultimately, arrive at deeper understanding and the simplicity that we seek.
Social and Environmental Impact Measurement Isn’t Simple, Yet
I often hear the concern, in conversations about social impact measurement and ESG, that “this social and environmental stuff is all awfully complex, isn’t it?”
This effective defense mechanism communicates, “I’m all for measuring my social impact, it’s just that it’s too much right now. Once it’s simplified, I’ll get on board and take it seriously.”
And yet, the person finding social impact measurement or ESG too complex is the same person who undoubtedly manages tremendous complexity in other areas of their professional life. Why, even the most simplified presentation of an income statement, cashflow and balance sheet is mystifying to most folks. Just look at this:
So the question isn’t whether something is simple or complex. The question is whether a domain is important enough to merit sustained time, effort, and spirit of inquiry to scale the Peaks of Complexity.
Coming back to social and environmental impact, my take is that the trillions of dollars flowing into ESG, and the pressure on brands to differentiate themselves for their social and environmental stewardship, speak for themselves.
The question isn’t whether sophisticated data and a nuanced understanding are needed.
The question is who will start on this journey first, thereby establishing an insurmountable lead on those who are happy to dawdle at the base of the mountain, in search of a way around or through.
It also helps to remember that a desire for quick and easy answers is nothing new. If anything, it is a normal and natural outgrowth of the beginning of every journey. If we’ve never walked a path before, we’ve no idea what it’s going to be like: we don’t know how high the mountain goes, how much jungle we’ll have to hack through, whether bad weather will come our way.
But the unavoidable, optimistic truth is that, should we walk this path we will, inevitably, arrive at better questions, deeper insight and, ultimately, the simplicity we are seeking.