Will Big Data Replace Strategic Thinking?

Gord Hotchkiss

Anyone who knows me knows I love strategy. I have railed incessantly about our overreliance on tactical execution and our overlooking of the strategy that should guide said execution. So imagine my discomfort this past week when, in the midst of my following up on the McLuhan theme of my last column, I ran into a tidbit from Ray Rivera, via Forbes, that speculated that strategic management might becoming obsolescent.

Here’s an excerpt: As amounts of data approaching entire populations become available, models become less predictive and more descriptive. As inference becomes obsolete, management methods that rely on it will likely be affected. A likely casualty is strategic management, which attempts to map out the best course of action while factoring in constraints. Classic business strategy (e.g., the five forces) is especially vulnerable to losing the relevance it accumulated over several decades.

The crux of this is the obsolescence of inference. Humans have historically needed to infer to compensate for imperfect information. We couldn’t know everything with certainty, so we had to draw conclusions from...

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