Data is one of the engines that drives modern society. Companies track our clicks to inform their next move, sports teams use data analytics to devise game plans, and scientists feed streams of data to their AI algorithms.

So, where do leaders fit into this burgeoning trend?

Joel Shapiro, a clinical associate professor of managerial economics and decision sciences at the Kellogg School, discussed how leaders can wield data to guide decision-making for their organization in a recent webinar. More on that this week.

Plus, lessons from the world of sports betting.

Data leadership

According to Shapiro, businesses have never wanted to measure more things, including people’s in-person and digital behaviors. Businesses see that they have access to better, quicker information and take it to mean that they can now make better, quicker decisions.

“But it doesn’t always work like that,” Shapiro says. “Just because we can measure things doesn’t mean we necessarily know what to do about it.”

It’s a trap that he encountered years ago while working as chief analytics officer at a sales software firm. One of the company’s competitors dug into its data and produced an eye-popping headline for its sales team: “cursing helps you win.” The competitor reported that sales calls with no cursing in them led to a deal 42 percent of the time, compared with 48 percent when the sales rep cursed. When both the sales rep and the customer cursed, that figure jumped to 50 percent.

It’s certainly possible that cursing was driving sales. But Shapiro’s instinct and experience in the field was telling him that the reverse was actually true—that only once sales reps developed a good-enough rapport with a customer did they feel safe enough to curse, and that the comfort of these relationships was driving the sales.

“So does cursing help you win? Maybe,” he says. “But I don’t believe that data tells us one way or the other.”

Rather than viewing data merely as information to turn into reports or dashboards, Shapiro recommends leaders focus on the evidence lying underneath the data.

“Data leadership at its core is about differentiating between data and evidence,” he says. “Data is just information. But evidence is contextual; evidence is directional.”

“One of the most successful things you can do with data,” he adds, “is to reframe data as evidence, because that makes sure that we are solving the important problems and doing something that pushes the business forward.”

When Shapiro talks about data leaders, he’s not only talking about people who are aspiring to be chief data officers but also about people—from marketers and finance executives to those in operations—who make strategic decisions about how to use data resources and initiatives to achieve business objectives.

“Great data leadership is not about the analysis; it’s about the impact you have—and impact comes from influence,” Shapiro says. “And as we hear more about AI replacing some workers, this is simply elevating the need for strong data leaders.”

Hear more from Shapiro in MIT Sloan Management Review.

Betting favorites

Speaking of finding evidence in data, an article in Kiplinger cited a study by Kellogg’s Scott Baker that found that the average person spends about $1,100 a year betting on sports events online.

While the amount of money people put into legal sports gambling rose, their net investments fell by nearly 14 percent. For every $1 a household spent on betting, it put $2 fewer into investment accounts.

By and large, the research shows that the hundreds of billions of dollars that consumers pour into online sports betting overwhelmingly came from money that used to be spent on more-stable, long-term investments, like retirement accounts. This trend was particularly pronounced in financially constrained households.

“In general, as entertainment and gambling spending goes up, bad things happen for people’s budgets in other places,” Baker says. “Net savings decline, and we see more indicators of financial fragility.”

Read more from Baker in Kellogg Insight.