Operational Data
Operational data record activities such as sales, shipments, and customer interactions. They can help managers assess a specific, recent situation, alongside research findings and experience. Their usefulness depends on how well they represent the decision at hand.
THE IDEA
Sourcing & Assessing
Managers often need to act before uncertainty can be resolved. Recent records of sales, shipments, customer interactions, and marketing communications can show what is happening in the organization. These records are operational data: information generated while carrying out organizational activities.
The Empirical & Experiential Evidence (3E) framework treats operational data as a central source of evidence for managerial decisions. General research can explain a pattern, while local records help establish whether it appears in this organization, at this time. Neither source alone answers every decision question.
The 3E framework contrasts management with medical practice, where scientific research and formal professional standards play a prominent role. Physician-patient interactions 1 and competitive organizational interactions pose different constraints. The useful point of the comparison is that evidence must fit the decision: managers need relevant local information as well as reliable general knowledge.
To assess operational data, ask what the records capture, what they omit, how recently they were collected, and whether they apply to the choice being considered. Exploratory analysis can reveal patterns worth investigating; confirmatory analysis can test a specified explanation or prediction.
When to use it
A supply chain manager uses real-time inventory and shipment data to make reorder decisions during a disruption, minimizing stockouts.
A customer service director analyzes call logs and chat transcripts to identify common issues and improve training programs for agents.
A marketing VP uses A/B test results from recent campaigns to allocate budget across channels for the next quarter.
A product manager reviews user engagement data from a new feature rollout to decide whether to iterate, roll back, or expand the feature.
FROM THEORY TO EVERYDAY LIFE
In practice
Retail Restocking Decision
A retail manager uses real-time point-of-sale transaction data (operational data) to decide which products to restock during a holiday season, ensuring shelves are filled with high-demand items.
Marketing Campaign Adjustment
A marketing team analyzes recent customer interaction data from email opens and clicks to adjust a campaign mid-flight, improving engagement rates based on timely insights.
A MOMENT TO REFLECT
Put it to work.
How can you ensure that the operational data you rely on is as recent and specific as possible for your current decision?
What are the limitations of using operational data without considering the broader context or potential biases in its collection?
When should you prioritize operational data over insights from scientific research in a managerial decision, and when might the opposite be true?
Often confused with
CONTINUE THE CONVERSATION
Source texts
- Evidence-Based Decision-Making How to Leverage Available Data and Avoid Cognitive Biases (Andrew D. Banasiewicz)