Why 'Data-Driven' Decisions at Most Companies Are Built on Unverified Guesses

Across industries, company leaders rarely have a direct view of their own operations — their understanding of reality is filtered through reports prepared by data teams, which may be incomplete or misleading. A common pattern called the HiPPO effect occurs when the highest-paid person's opinion is accepted as fact without evidence, simply due to their seniority. Even processes that appear rigorous, such as A/B testing and product analytics, rely on human assumptions about what to measure, how to instrument it, and how to interpret results — none of which are typically verified. The author argues that the core problem is not individual incompetence but a flawed methodology that mistakes instrumented guesswork for genuine insight. Larger, better-funded companies can mask this weakness with top talent, but most organizations end up making consequential decisions on conclusions that are never truly proven right or wrong.