Competing With Data & Analytics
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We have disturbingly little idea how many of the algorithms that affect our lives actually work. We consume their output, knowing little about the ingredients and recipe. And as analytics affects more and more of our lives and organizations, we need more transparency. But this transparency may be a bitter pill for businesses to swallow.
In 1906, Upton Sinclair’s The Jungle described the oppressed life of immigrant workers, specifically those in the meatpacking industry in Chicago. Sinclair’s intent in portraying the working conditions of a powerless class may have been to inspire political change. However, the graphic depictions of unsanitary food preparation helped bring transparency to manufacturing processes through the story’s nauseating clarity. The book heavily influenced the creation of regulatory oversight through organizations that eventually became the U.S. Food and Drug Administration.
We might be similarly horrified if we knew what evils lurked in the hearts of business algorithms in use today.
Some examples are lesser evils. Google search is widely used, but details about the order (and inclusion) of pages in its results aren’t public. Credit scores directly affect our finances, but the specific algorithms used to calculate them are secret. And the use of analytics to create algorithms is spreading rapidly to judicial processes, advertising, hiring, and many other daily decisions.
But these are the oxymoronic obvious unknowns. There may be greater evils lurking beneath the surface. The internal operations of businesses have always been a bit murky to consumers. There are algorithms in use within organizations that we as consumers don’t know that we don’t know about — preferential treatments, pricing differences, service prioritization, routing sequences, internal ratings, and so on. There is little opportunity even to know these algorithms exist, much less the analytical results on which they are based.
It actually makes sense that we lack good ways to see how analytical results are produced. Companies want to protect their intellectual property — this is their secret sauce. Whatever advantage companies get from data does not come without effort. Given the considerable investment underlying that effort, companies would certainly be reluctant to give away their hard-earned insights embedded in algorithms. Why would they even consider it?
The difficulty, as in The Jungle, is that others consume what is produced.