From Data to Disaster - Don't be Data-Driven
or at least, not all the time.
According to a recent International Data Corporation (IDC) study1, 83% of CEOs want their organizations to be more data-driven. You may have considered this for your own company, pushing for data integration. But while data is crucial, it’s not everything.
I have so much to say about data, and a recent article by Massimo Giunco, a former senior brand director at Nike, pushed me to address this topic. On Sunday, July 28th, Giunco published a LinkedIn post that has already garnered over 800 shares, 5,500 likes, and nearly 500 comments. In his analysis, he highlighted the decline of Nike’s market cap from $250 billion in 2020 to $110 billion in 2024, noting a dramatic 20% drop in a single day last June, which wiped out approximately $28 billion in market value.
Giunco attributes this decline to several strategic missteps, two of which stood out to me. However, they both have one common theme: prioritizing data over humans.
What do I mean?
Ignoring Human Knowledge Importance: The overconfidence in data-driven insights led Nike to replace experienced category experts with algorithms. In six months, hundreds of employees were fired, resulting in the loss of a solid process and invaluable expertise.
Misreading Customer Behavior: Nike's shift towards digital marketing and performance marketing neglected traditional brand-building efforts. The focus on programmatic advertising over creative storytelling led to a disconnect with their customer base and a significant waste of resources.
Giunco points out that Nike historically built its brand through compelling stories and inspirational marketing centered around athletes and sports culture. The company's recent strategy under John Donahoe overly mimicked e-commerce businesses, prioritizing data and performance metrics over creativity and emotional connection.
Now, I am no expert on Nike's ins and outs, and honestly, I don’t think it is important, because in a data-driven world, intuition, storytelling, and human insight are being replaced more and more. But when it comes to innovation, we need to remember one thing—data is not creative. It doesn't understand human behavior and is inherently past-driven, not future-driven. Giunco’s analysis underscores this detrimental effect of over-relying on data-driven decisions and losing the art of storytelling.
Business leaders who prioritize innovation and creativity understand that they should not rely on data only. Bob Iger, CEO of Disney, once said,
“One of the most interesting and perhaps challenging aspects of creative storytelling is that you're often giving consumers what they want before they actually know they want it. That takes a lot of instinct. Collecting data about that marketplace, in order to determine what story you tell or how you tell a story, to me, is a waste of time.”
In creative organizations, data should be just one of many tools. Ed Catmull emphasized,
“Measure what you can, evaluate what you measure, and appreciate that you cannot measure the vast majority of what you do. And at least every once in a while, make time to take a step back and think about what you are doing.”
I can continue citing more examples, but you get the point.
Many industries have become heavily data-centric, with decisions often based on algorithms. However, data doesn’t design products; it lacks creativity and emotion. Solely relying on data means decisions are based on past trends, akin to "looking in the rearview mirror." True innovation requires a blend of instinct and data.
To be clear, I am not against the use of data—in fact, I strongly support it. Data is an invaluable tool that should be used alongside other methods to uncover hidden insights. However, the effectiveness of data depends on what we choose to measure, the questions we ask, and the biases we bring to the analysis. As Giunco highlighted, Nike faced significant challenges because they lost clarity on what to produce, when to produce, and where to ship. Their inventory ballooned from $6.5 billion in 2021 to $10 billion 18 months later, demonstrating the inconclusiveness of their data-driven predictions and the subsequent breakdown of their supply chain.
Overall, Giunco’s critique highlights the risks of abandoning traditional storytelling and brand-building strategies, which rely heavily on human creativity and intuition, in favor of purely data-driven approaches. This shift can lead to short-term gains but ultimately results in long-term value destruction for a brand like Nike.
Here’s the thing: technology, including data, should serve people. It’s about enhancing the customer experience, not just driving sales. Using data to understand and meet your customers’ needs will naturally lead to increased sales. Businesses are ultimately in the business of people; the transaction is the product.
As a humanist-technologist, I believe in the importance of a balanced approach. While it’s tempting to focus solely on the analytical and rational, we must not forget what makes us human—our emotions, aspirations, creativity, and intuition. For that, we need people, not just data. Successful brands often strike this balance well.
Next time you find yourself being data-driven ONLY when making decisions, consider being people-driven instead. Think about what you might lose when you replace people's expertise, knowledge, and insights. Use data as a tool to enhance your understanding of and service to customers. True innovation looks forward and combines instinct with data, creating strategies that not only drive sales but also foster meaningful connections with customers.
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