Winning the war with analytics

“From 1941 to 1943, a small group of British and American scientists, almost entirely without military experience or knowledge, revolutionized the way wars are run and won.” So begins a new book about what is widely considered the birth of analytics.

The military didn’t call it analytics. The many different scientists who participated in the war effort were doing what the military deemed “research into operations,” giving rise to the name “operations research” (for more on the relationship between analytics and operations research, see “What is INFORMS and why should I care?” Analytics, March/April, 2012). But the thinking was distinctly analytical. And it was truly revolutionary.

Throughout the First and Second World Wars, German U-boats were a threat to Allied merchant ships and the war effort. The question asked of these early analytics practitioners was, at least on the surface, quite straightforward: What’s the most effective way to sink U-boats? Issues ranged from optimal search patterns to the deployment of depth charges. The book “Blackett’s War” by Stephen Budiansky describes how mathematics and data were for the first time used to drive decisions that had previously been made by military personnel. The scientists’ methods proved extremely successful, showing ways to “double or triple the effectiveness of the faltering Allied campaign against the German U-boats.”

But as anyone who’s practiced analytics knows, technical accomplishments are only part of the story. Getting technical people and non-technical decision-makers to communicate is just as vital, if not more so. As Budiansky points out, the scientists not only faced a general distrust of intellectuals but the acrimony that accompanied civilians telling military officers how to do their jobs. The thought that analytics gestated in the traditional military establishment of the mid-twentieth century is almost unimaginable until one considers the circumstances: the world was at war. And Budiansky leaves no doubt that analytics was vital to the Allied victory.

I like to think that companies are engaged in healthy competition, not war, but sections of “Blackett’s War” couldn’t help but evoke thoughts of companies I’ve worked with over the years. Some are driven by analytics. Others, not so much. But what I’ve noticed is that deep down, companies that want to use analytics are seeking to do something even more fundamental than use data: they’re seeking to apply a more rational approach to decision-making.

A well-worn story I like to tell is of a client who once informed me he used a “ceiling strategy” when making forecasts. Having never heard of this technique I took the bait and asked, “What’s a ceiling strategy?”

“I lean back in my chair and look at the ceiling,” he told me, “and I make a forecast.”

Thankfully he was joking (or so I think), but the story underlined what the quest for analytics is all about. Is looking at the ceiling any way to make a forecast? What about the alternative of something as simple as looking at comparable sales from the prior year? Why not make adjustments based upon more recent sales trends? These are the questions competent, reliable, successful businesses are asking. Analytics is about math and data, but only as a means to an end. The end is to make better, more rational decisions.

And like the Allied forces, the use of analytics is becoming increasingly necessary for companies who want to “win the war.” Poorly targeted sales campaigns are like poorly targeted depth charges: they fail to reach their objective.

I can’t say I was there to witness the birth of analytics, but I’ve been fortunate to watch it grow. Apple was founded in 1976, the year before I graduated from high school. The Apple 1 came standard with 4 kilobytes of memory, enough to hold the characters in this column about four times over (forget holding any software to manage those characters). At the time it was unimaginable that we could process anything like the amount of data we now routinely work with on our home computers, much less on arrays of servers. Astonishing is an understatement. It’s an unbelievably exciting time for analytics practitioners and the companies they work for. How is it possible to provide so much benefit and have so much fun at the same time?

This is my last “Profit Center” column. Much as I’ve enjoyed offering my perspectives on analytics, I fear they may soon lack a freshness that you, the reader, deserve. I hope to reappear in the not-too-distant future with a new column based on analytics case studies. It would involve less ruminating and more reporting – a nice respite for this analytical mind.