Here is an excerpt from an article written by Eugene Burke for Talent Management magazine in which he explains why big data is not as important as big insights — the relevance, impact and action that come from data, and lead to better decision-making and performance. To read the complete article, check out all the resources, and sign up for a free subscription to the TM and/or Chief Learning Officer magazines published by MedfiaTec, please click here.

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There’s a problem in the world of big data, and size isn’t the issue. More data is not adding up to better decisions.

A 2012 Oracle study shows the volume of data has increased an average of 86 percent in the past two years, and 60 percent of executives rate their companies unprepared to leverage the data and cite significant gaps in people, processes and tools.

For those in talent management, this problem is compounded by the nature of the investment decisions they manage. Research firm the Aberdeen Group found that in 2012, 49 percent of organizations aimed to address business leaders’ inability to leverage HR and workforce data to make better operational decisions. Research from the Corporate Executive Board, or CEB, found that business executives will require, on average, a 23 percent improvement in senior leader performance to achieve performance goals across the next 12 months. (Editor’s note: The writer is an employee of CEB).

The new work environment, however, is driving significant and universal changes for senior leaders. Nearly three-quarters of senior leaders report they face more flux in their roles and responsibilities compared with three years ago. Such high exposure to new situations that are different in magnitude, kind and predictability leads to an average drop of 16 percent in leader performance — that’s a substantial performance penalty at a time when executives are calling for aggressive performance improvements.

This presents a challenge. Talent leaders are being asked to provide evidence that investments made today will pay off, but the return on investment will not be seen for years to come. Further, talent managers have said their biggest challenge with big data is where to focus the investments in the HR function, according to the 2013 study “The Emerging Big Returns on Big Data” from Tata Consultancy Services. If talent managers struggle with where to focus their investments on big data and need to provide evidence on those investments paying off, where should they start?

How to Drive Big Insight

Organizations are increasing their investments in leadership development, both in absolute terms and as a proportion of their overall leadership and development spending. CEB research finds that 68 percent of organizations increased spending on senior leader development in 2011 and 2012, and the average organization is forecasting an increase in spending on leadership development of 5 percent in 2013. Further, nearly two-thirds of organizations surveyed reported senior leader development represents a greater proportion of the leadership and development budget than it did three years ago.

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To read the complete article, please click here.

Eugene Burke is Chief Science & Analytics Officer at CEB-SHL, Kingston upon Thames, United Kingdom. You can contact him at the firm.