Competing With Data & Analytics
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Time to panic!
Every organization boasts awesome analytical prowess — except yours. Infiniti Red Bull Racing deftly analyzes gigabytes of data each race to boost performance. Hollywood filmmakers mesh emotional data collected at every heartbeat with complex algorithms and data-based decision making to craft optimal stories. They’re all doing it. And making it look so easy.
But despite public declarations otherwise, deep down, you may know that your organization isn’t using data well. You fear that an insurmountable disadvantage has developed based upon the gap between the analytical capabilities that you know your organization has and what your competitors seem to have.
In the well-known fairy tale by Hans Christian Andersen, everyone incorrectly believes others can see the Emperor’s fine clothing. Having been told that only the wise can see the cloth, everyone fears that they alone lack the ability to see it and are uncomfortable with publicly admitting this is the case.
Similarly, I suspect that our impressions of the analytic capabilities of others may not be entirely accurate. Why do I think so? Because reporting bias and social desirability make it likely that reports of analytics capabilities are, at best overblown.
Consider: positive reports of analytical capabilities get attention. We all like epic tales where analytics reveals hidden insight and creates value. It can and it does. But we see far, far fewer stories about organizations that are not using analytics at all, or that are using analytics poorly. Our impression is formed by the reports we see, not by the reports we don’t.
Moreover, with the current popularity of analytics, organizations have incentives to highlight their analytical capabilities so others will view them favorably. When analytics stories are told around corporate campfires, data sizes and capabilities grow with each retelling — they’re probably as elastic as the fish that got away. The stories just sound better with more data, more complicated tools, and fancier models. With the current emphasis on analytics, no one wants their organization to be data-inept — the “fool” of the Hans Christian Andersen tale who can’t see the miracle cloth draped on the Emperor.
The good news is that, if you know your organization needs to improve its analytical capabilities, you may not be that far behind everyone else.