“A myth, a temptation of a lot of managers, is they get more and more of this data and there’s a temptation to control and monitor everything,” says Erik Brynjolfsson, director of the MIT Center for Digital Business and the Schussel Family Professor at the MIT Sloan School of Management. “That’s exactly the wrong instinct. As data floods into the company, as we go from an information desert to an information jungle, the bottleneck at the tops of organizations gets more and more constraining.” Distribute decision making more broadly, he says. Bring more minds to bear. Decentralize. Tap the power of the masses.
Brynjolfsson made his comments (at around minute 35) in a 1-hour virtual panel discussion this afternoon. The discussion also featured Steve LaValle, global strategy leader for IBM’s Business Analytics and Optimization service line and Stephen Baker, author of The Numerati. It was moderated by Michael S. Hopkins, editor-in-chief of MIT Sloan Management Review. It’s available for on-demand viewing.
LaValle said he agreed with Brynjolfsson. “We’re doing that now,” he said. “We draw large amounts of data from the web and then we can do sentiment analysis against them. We’ve used this for branding purposes.” For instance, he said, one organization he worked with wanted to make changes in its brand and made a pre-release announcement. The announcement generated reaction on the web. IBM collected, reviewed and then give back to the company a selective list of the collective wisdom of that crowd.
“One area where I see things developing is figuring out which people, through an analysis of their data, are most likely to be experts in one thing or another,” said Stephen Baker. That will help companies know whose opinions to most value.
While everyone agreed with the perception that advancements in this area are going to continue to come fast and furious (making “for a more exciting life in executive suite,” as Brynjolfsson put it), everyone also agreed that there are ways to tackle the use of analytics that are incremental and not overwhelming. Although it’s useful to know the clever ways that Google and Amazon are using continual testing to refine their projects, it’s not necessary to benchmark yourself again those big companies. Do what seems easiest, advised Baker. Don’t discourage yourself by imaging that you’re in a swim race against Olympic gold medalist Michael Phelps.
The discussion was organized in conjunction with last week’s release of the special report Analytics: The New Path to Value, prepared by the MIT Sloan Management Review in collaboration with the IBM Institute for Business Value. A PDF of the report is available for download.
You can follow (and join in on) the conversation online here or on Twitter by tracking the hashtags #smarterleaders and #tnie. Also check out Erik Brynjolfsson’s blog economicsofinformation.com and Stephen Baker’s website, which he terms a “take on technology and life.”