Author: Gohar Fatima
We humans, love stories. And it is only human to share perspectives and form narratives around our experiences. From prehistoric cave paintings to fairy tales, from contemporary storytelling to fiction novels, they all serve as evidence of our love for stories. Moreover, stories are not limited to mere entertainment purposes; they also serve as a tool to make sense of the world around us; they allow us to relay information and learnings to others and make informed decisions in turn. So, we can easily conclude that human narratives and experiences form a crucial part of our existence.
At an intuitive level, we don’t doubt the importance of narratives. Still, when it comes to decision-making in the 21st century, human perspectives are undervalued, and quantitative data takes center stage.
Estimates show that by 2024, 149 zettabytes of data will be created, captured, copied, and consumed worldwide. For the human brain that has relied on the spoken word for survival, this figure isn’t something it can easily comprehend.
As a student of economics, trained mainly in the neoclassical school of thought, I am surrounded by endless mathematical models which aim to estimate and explain the actions of economic agents. These agents are;
– Public and private players such as governmental organizations
– Private organizations
– Banks
– Households/individuals
Economic agents are, by definition, everyday humans. If we look beyond the economic titles, we are left with everyday people prioritizing and acting in different ways. So, in essence, when we say ‘agents’ we are referring to people. These players then interact in the business and household space. The infamous circular economy diagram neatly explains this.
Doughnut Economics, Kate Raworth
This is “the economy” stripped down to its bare-bones, a no-frills depiction intending to convey its ins and outs. Wages & profit, spending, imports & exports are all things that can be best represented with equations and quantitative data. But are numbers and equations the only things that make up our economy? Indeed we are missing something.
There exists an irony in the circular economy.
The stripped-down version of the economy — one that is made of people disguised as economic agents — fails to capture human narratives which make us who we are.
We discussed the significance of stories but looking at the circular diagram, it seems that human narratives don’t make the cut.
Although economics has its roots in philosophy, where important issues were solved through dialogue, it has evolved into a quantitative discipline led by numeric data. Collectively, as a society, we too have given more importance to quantitative data than human insights. Here ‘data’ refers to all findings that can be quantified in numbers through statistical methods, e.g., GDP figures. While ‘human insights’ refer to those findings gained from the dialogical process such as interviews and focus groups.
‘Data’ is also helpful as a tool to measure progress towards goals, but in reality, the opposite occurs — what should be a tool becomes the goal. Economist Charles Goodhart first noted this in 1975, which is now formalized as Goodhart’s Law:
This is not to say that quantitative data itself has no value. We know that stats and analytics may back up real outcomes; it paints a good picture of ‘what’ happened looking retrospectively. Yet, that alone does not explain the whole picture.
For example, with numerical data, we know that the global economy crashed in 2008 — we have the ‘what’ of the story. To fill in the gap, in other words, to know the ‘why’ and ‘how’, we need to turn to human stories. Quoting economist Robert J. Shiller:
“Human thinking has to be studied if we are going to understand economic fluctuations.”
Quantitative and qualitative data are two halves of a whole.
Taken together they give us a complete story. When used in isolation, we may only have a partial understanding. There is a hidden economic benefit that organizations can tap into which currently is overlooked — human insights.
Looking for the human perspective to understand a customer’s real needs paves the way for creative problem-solving. Finding the hidden insight leads to an ‘aha’ moment which is characteristic of true insight. This clarity then allows an organization to brainstorm innovative solutions for their customers. Once they understood the ‘why’ behind the customers’ actions, it was easy to support it with quantitative data to paint the big picture.
While working on an insight-generation model with one of our partners, we asked them to reflect on their experience of working with human insights. This is one of the feedbacks that we received:
“When we think of customers we think in numbers, its always about ‘did they see this product?’ or ‘did they buy this?’. But we never put a face to the customers. Actually seeing and knowing them up close is very interesting.”
When an organization discovers deep human insights, as a whole, it undergoes a perspective shift with respect to their customers’ needs which in return leads to a new way of thinking — giving them an upper hand over their competitors. Which naturally leads to increased turnover. Therefore, the fundamental economic benefit of human insights is the competitive advantage that it adds to an organization.
Boiling down people’s behavior and experiences into percentages and diagrams only pushes organizations away from the human and stops them from uncovering the truth. Instead, organizations must understand who these people are as humans first if they want to create real value and real connections.
Human insights do have a place in the circular economy by adding to the ‘profit’ flows. Hence, they are undoubtedly an economic benefit, but it is underutilized and sometimes outright ignored. Here lies the hidden economic potential of human insights.
If we were to take a more active stance towards human narratives, to really understand each other’s experiences, more organizations would benefit from this competitive advantage resulting in economic benefits that would positively impact us all.
Intuitively, we all value human stories. We have also seen the economic benefits to organizations. It would only seem like common sense that we should be incorporating more of it in our decision-making. So, why don’t we do more of this?
