Once upon a time, there was a wizard named Robert McNamara who was better than any other wizard in the land at using data to find missing parts. This made him very popular with the military, which had so many things that it could not find them when it needed to fix its planes and tanks and such.
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Thanks to Wizard McNamara, the military even found $3.6 billion (in efficiencies)! This made everybody agree he must be the Best Whiz Kid in the land, and everybody wanted him to help find money wherever he went.
A Very Important Company hired the Wizard McNamara, but life was not so easy here. He had a hard time getting the workers to tell him how many widgets #9 they had versus widgets #10s. So he became very grumpy about getting all the data he needed to perform his magic. And he was so sure that his magic was right, he made them all live by rules like “No new car models until all the Widgets #9 are used up from the first car model.”
It was the kind of thing your parents might say, like eat your vegetables: While it seems like a good idea, green beans make you sick. So, instead of fighting, you just feed your green beans to the dog. And that is exactly what the workers did: They dumped the extra parts into a nearby river.
But no one knew that for a long time, so everybody thought the wizard was still the best in the land.
Finally, the king learned about the wizard and hired him to help win a very difficult war in a land far away.
The Wizard McNamara told the king that he should count all the people who die in the war. The more people who died, he said, the closer you will be to winning the war.
But after many years, the war was not won. In fact, the king had to just stop the war and send everybody home, but not before many, many people died.
Finally, all the generals admitted that they thought this data was the stupidest thing they’d ever heard and no help at all. They also admitted they had lied so their numbers would impress the wizard.
Moral of the story: Data must be reliable and even then, used with caution. “The War Managers,” a survey by retired Army general Douglas Kinnard, revealed that only 2 percent of American generals considered body count a valid measurement of progress. Generals admitted many units grossly exaggerated the numbers, according to a recent MIT Technology Review article by Kenneth Cukier and Viktor Mayer-Schönberger.
The article cautions against such a “Dictatorship of the Data:”
“We are more susceptible than we may think to the ‘dictatorship of data’—that is, to letting the data govern us in ways that may do as much harm as good. The threat is that we will let ourselves be mindlessly bound by the output of our analyses even when we have reasonable grounds for suspecting that something is amiss.”
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