Watch Out for Fresh, Hot Data

As company leaders, we want to be well informed about what is happening in our startup.  Yet fresh, hot data is fraught with challenges. Treat it with care.

My application scientist poked his head through my door and said, “Hey, Jen, have you heard about the beta results?” His tone was cautious. My antenna went up. Neutrally I said, “Not yet. What’s up?” He paused and then unleashed a torrent of fresh, hot data. Early results, incomplete analyses, emerging trends all came forth in a rush along with plenty of worried side comments. He concluded with a duck of his head, “Well, I thought you needed to know what we are dealing with.”  

In my mind, I paused and mentally controlled my reaction to what was quite frightening results – if they were real.  Out loud, I said, “Hmmm. That is interesting stuff. Thank you for telling me. I really appreciate it.”  Then, I took a deliberate breath, and said, “Why don’t you and I plus [your colleagues] meet tomorrow late afternoon to talk through what it might mean? See what you all can figure out about the possible causes of the problems by then, and we will figure out what to do.” With that, I smiled and nodded at him as I turned back to my computer.  Even though I knew my Board members were anxiously awaiting the beta results, I would wait a couple of days while the data settled before sharing the results.

What is Fresh, Hot Data?

Fresh, hot data is some pivotal information that often arrives suddenly or unexpectedly. For example:

• The preliminary data in an important study
• The first set of critical beta test results
• The initial reactions at a conference
• A competitor’s newest foray into our space
• A critical systems failure or outage

What makes it fresh and hot is that it is new, unverified, confusing, and often has potentially game-changing impact. What makes it dangerous is that how you react can have enormous ripple effects. 

Keys to Responding Well to Fresh, Hot Data

No matter what the news is, react positively to whoever shared the latest and greatest data with you. Thank them for letting you know. Even if it is horrible news.  Even if it is really horrible news. Regardless, you do want to know. And the thing you want to avoid doing is shooting the messenger. If you do, you will cut off critical future communications and create a potentially crippling culture where no one wants to give you bad news.

Next, know that the team’s first reaction to fresh, hot data is almost always too extreme.  Their and your initial emotional response of either fear or elation is usually greater than warranted.

Therefore, do not act on the data immediately. 

• Do not tell your Board of Directors instantly.
• Do not put the information in your investor report that is you are issuing tomorrow.
• Do not make essential snap decisions based on the data, if you can possibly help it. 

Give the fresh, hot data a chance to settle.  Encourage your team to explore it further and think through the implications.  Wait until the next day.  Have a follow-up discussion to learn what the emerging understanding is and what the limitations and consequences of the data are.

What almost always happens is that as you give yourself and your team a chance to dig a little deeper and understand the data in a more nuanced way, the implications of the data “regress toward the mean/middle” What initially seems awesome or disastrous becomes merely good news or bad news.  Deliberately giving yourself and your team a chance to move past the initial emotional reaction helps everyone move into problem-solving for either taking advantage of the new opportunity or mitigating the problem. 

Once the fresh, hot data has been more deeply understood, then it is time to make decisions about how to move forward.  And proactively communicate not just a problem, but the first steps toward solving it with your outside stakeholders.

The bottom line when dealing with fresh, hot data is to moderate your own reaction and intentionally wait. Not long. Just enough to let the next layers of understanding emerge. Then you can act with insight, wisdom, and greater confidence.