Last month we joined over 5000 people across Canada to attend the Deloitte360 conference, where Malcolm Gladwell gave a thought-provoking keynote speech. Gladwell argued that although advances in technology and data analytics will make the quality of our decisions better, it will make the life of decision-makers much harder. To explain, he compared puzzles with mysteries. A puzzle is a problem caused by the lack of information. A mystery is a problem caused by an excess of information. The past was a world of puzzles and the future is a world of mysteries. Mysteries impose a heavier responsibility on decision-makers to sift through and make sense of the enormous mounds of data available.
Gladwell went on to give a very Canadian example related to hockey, and in specific, the problem that NHL general managers have in evaluating the performance of goalies. Traditionally, the three best statistics to measure were save percentage, shut-outs, and average goals allowed. But the problem with these statistics is that they are not goalie specific. Goalies that play on better teams end up having better statistics.
With the data revolution in hockey, a new statistic has been created called GSAx (goals saved above expected). This statistic takes into account the chance the shots would have gotten in and the difference between expected and actual goals. Most people in the hockey world agree that GSAx is a better statistic at measuring the goalie’s contribution and ability. But the problem is, with better data like GSAx, NHL general managers are actually having a more difficult time evaluating goalies.
This is the paradox. Improved data and technology will improve our decisions, but it will make the life of the decision-maker harder. This is a problem that everyone will face in the future.
Here’s another example that Malcolm Gladwell shared and it’s related to the logistics industry. The number 1 source of customer and employee complaints at airlines is the fact that the gate closes 5-10 minutes before the airplane leaves. Ticket-holders who arrive at the closed gate are frustrated when learning that they cannot board the plane, even when the plane is still docked at the gate. What’s even more frustrating is that the ticket-holders can visibly see that the plane is there and not moving. The gate attendants are not pleased that they have to explain this to the angry ticket-holders.
Airlines adopted this practice because they didn’t want to suffer the negative consequences of their planes getting behind schedule. During the pandemic, United Airlines developed artificial intelligence to solve this problem. They utilized an algorithm to note which planes could make up for time lost if it departed later and communicated this to the gate agent, giving them discretion to make the decision. The results were miraculous and everyone was happier. The data made for a higher quality decision and better customer experience.
However, the data made the life of the decision-maker harder. It took away the decision from the pilot, who had to share the decision-making with the gate agent. Instead of a simple decision by the gate agent, it became a complex one, where they had to take into account multiple data points.
Current leaders have grown up in a world of puzzles, where the job of the decision maker was to collect information and make a decision. But today’s world is one of mysteries, and the more data the decision makers have, the more complex their choices are.
In the world of transportation and logistics, the amount of data we have available is increasing. For example, in the past, shippers relied on the limited data points of Estimated Times of Departure and Arrival. Now, we have technology that gives us the exact location of cargo, with only a 20-minute delay. While that information allows for better decisions to be made, it makes the lives of shippers more complex.
At Canaan Group, our mission is to provide logistics solutions for your business. As we move into the future and implement new technology, we are able to provide more data for better decision-making. But we realize that this added data can make decision-making more complex, so we are also mindful to take extra time with our clients to explain the data, how it works, and how it can help so that you can make the best decision for you.
1. Keynote presentation by Malcolm Gladwell, 360 by Deloitte: Future-focused October 27-28, 2021