Analytics-driven culture

“In the final analysis, the root cause of Japan’s defeat, not alone in the Battle of Midway but in the entire war, lies deep in the Japanese national character. There is an irrationality and impulsiveness about our people which results in actions that are hap-hazard and often contradictory.”
– Mitsuo Fuchida and Masatake Okumiya [1]

Business analysis dissolves in an IT culture and in other cultures too. Philosophically, business analysis is in its Romantic Era – an era in which analysis is applied hither and yon in a tactical swashbuckling manner. Corporations aspiring to improve their decision-making to become more analytics-based will want to foster a more analytics-driven culture. They should seek a culture that:

1. Rewards analytics-based decision-making as in a meritocracy.

2. Integrates analytics into their strategy.

3. Embraces the pace of dynamic change during this analytics phase of the Information Age.

4. Accepts that understanding data analysis is part of understanding the business.

5. Fosters experimentation and continual learning about the business.

Corporate culture can be defined as “how we do business.” An analytics-driven culture necessarily blends analytics and company know-how. We can raise the analytics content of the culture by adjusting the leadership, specialization, delegation and incentives [2].

Analytics-driven cultures have built a legacy of seeking great financial opportunities based upon the numbers. They have learned to accept or tolerate the scientific method, plan for analytics, and enable analytics to drive decision-making. They are more deliberate in collecting appropriate data for their decisions. Rather than passively reacting to the data available, their proactive planning includes thinking ahead to seek new types of data that does not yet exist.

A crude measure of a corporation’s acceptance of analytics is the extent to which analytics professionals are spread through the company. If a corporation wants to develop a more analytics-driven culture, then it needs to expose people to business analytics and spread analytics professionals throughout the company – growing the culture by spreading the approach.

Left Brain–Right Brain Cultural Clash

The explosion of information implies that we need to apply scientific tools; this is not about pottery or poetry. Left-brain purveyors of the scientific method sound like Mr. Spock or today’s modern icons, Dr. Samantha Carter and Dr. Daniel Jackson of Stargate SG1. Analytics professionals are trained to accept their ignorance, value humility in presenting results and qualify their statements. They are often self-made.

At a large bank, a group of predictive modelers was told never to say, “I don’t know” when answering questions from senior management. Similarly, they were told not to include caveats in their presentations. All these confessions of ignorance and qualified statements appear like “doubt speak” to the right-brainers. Do you have the answer or not? Captain Kirk, or the sensibly upgraded Dr. Elizabeth Weir of Stargate Atlantis, just want the answer so that they can “decide already.” Should we put our phasers on stun or close the stargate? Was that so difficult?

We can benefit by thinking through these cultural differences.

What you need to know if you are dating a right-brainer: Left-brainers, you need to go to charm school and forget about impressing others with your level of preparedness, intelligence and impeccable logic. Okay, we get it; analytics is subject to uncertainty. Now start socializing analytics so it is not so threatening.

Making other people feel stupid does not make you appear very smart. Stop qualifying your results. You dwell much too much on the fact that if your analysis is correct, then there is still a chance that the conclusion is wrong – incomplete information being what it is. Finally, if you are in a non-analytics culture, then you need to do more than write a glossary of acronyms and speak the local language. You must walk the walk, too. You need to behave as much like the right-brainers as you can stand – conform a little, sadly. Just deal with it.

What you need to know if you are dating a left-brainer: Right-brainers, you need to appreciate that the left-brainers have the lonely responsibility for getting the facts right in the face of messed-up, incomplete information. Going forward, you need to evolve, to accept more of the communication burden, to think differently. Is this so threatening? You want to embrace or at least accept uncertainty. When reading analysis, you should interpret signs of intellectual humility as signs of intellectual humility and not weakness. If you want the left-brainers to explain things simply, then you can help by reminding them that you realize their work is complex. Keep asking them the same question until you get it. Do not give up. However, you cannot expect them to divulge their secret techniques.

If the above was not enough for you, left-brainers will want to share all of the bad news they have discovered. Just deal with it.

What we all need to know: In practice, we all have left- and right-brain behaviors, and anyone who thinks that some group of people is homogeneous does not know much about them. Now that we are in the Information Age, it is no longer wise to run a company with half a brain. Today, our medieval corporate cultures from the Dark Ages place too much of the burden on the left-brainers to get the numbers right and explain it so that a right-brainers can understand it [3]. This is unreasonable – or at least not optimal. Instead, we should ask for the caveats and accept the “I don’t knows” on our way to cashing in on analytics. In analytics, there can be something suspicious about someone with all of the answers; they are not left-brain. The cultural change we seek is to be both left- and right-brain.

Denying the Serendipity of Statistics

Before purchasing expensive data or executing a sophisticated analysis, you should plan how you are going to use this information or how you are going to analyze a business problem. Having a plan makes sense – just not perfect sense. No one sat down and wrote a detailed plan for the discovery of penicillin. It was a complete accident. Many great discoveries happen by chance. Holding a data request up to the standards of a mathematical proof is a bit much. This is a chronic breakdown point and the site of many a discombobulation. In an analytics-driven culture, it should be sufficient for a plan to entail what you expect and emphasize the economics of the possible exploratory work. We may need to make numerous attempts on our way to success.

Finally and foremost, we must resist the temptation of allowing people to present other peoples’ analytics work. This delays acclimation and creates a deceptive culture. At a number of corporations, this is the standard. No one below a certain rank is given the privilege of presenting to senior management, and the token few qualified analytics professionals will always be below that rank – whatever it takes. This senior management intends to stay insulated in the “executive management bubble,” all right-brain.

Notes & References

1. It is an amazing feat to write a book about a naval battle and tie the outcome to a cultural characteristic. See “Midway: The Battle That Doomed Japan” by Mitsuo Fuchida and Masatake Okumiya (1955).

2. “Competing on Analytics: The New Science Of Winning,” “Analytics At Work: Smarter Decisions, Better Results,”“Data Driven: Profiting from Your Most Important Business Asset,” and “Super Crunchers: Why Thinking-by-Numbers Is the New Way to Be Smart,” among others, have made it clear that analytics is too understated in the blend.

3. This is the right-brainers saying they cannot be bothered to think in a left-brain manner for a single moment.