Many companies don’t, argues Adam Richardson in this Harvard Business Review blog post. And when they try to innovate they’re hobbled without the “core insights” to successfully differentiate themselves from their competitors.
The data that drives those core insights – the type of forward thinking that has allowed Toyota to blow past competitors like Honda in the hybrid car market with its Prius – are often locked deep in disparate systems, hidden from employees seeking to uncover the next big idea.
Business analytics is the foundation for companies to discover the equivalent of Toyota’s core insight that the market was more interested in saving the environment rather than just saving money.
“Clear, deep, relevant insights help you stay one step ahead of competitors who may try to imitate your creations,” Richardson notes. “If they can’t replicate the thinking driving your innovations, they’ll be doomed to ‘me too’ status.”
But whereas core competencies are about “know how,” core insights are about “know why.” Business analytics can help you get to the “know why.”
Here’s how: Richardson argues that a core insight is the quintessential “Aha!” about what will motivate customers and tantalize the market by connecting the dots between marketing, customers, sales and demographic data.
In most companies, this data typically lives in many different systems, and an employee might have a slim chance of uncovering a core insight if he’s forced to wait in line for IT to run a report or if he has to dump data into a spreadsheet himself. These methods are arduous and don’t allow companies to quickly and easily tap into the innovative power of every level of the organization.
Thus, organizations are left trying to come up with core insights based upon gut feelings and intuition alone – not an effective way to root the innovative risk-taking needed to shape a market.
Core insights take data and make forward looking predictions, like how customers will act in the future or where, when and how a market will shift. Gartner Inc. describes analytics as the “combustion engine of business” and notes that the companies that use predictive analytics to analyze voluminous structured and unstructured data will grow 20% more than their competitors.
Retailing behemoth Macy’s, for example, has used analytics to demystify long-standing notions of what customers want to instead gain core insights from transactions, data and loyalty programs. Instead of relying on its traditional “know how” of organizing around products, the company has refocused on “know why” and improving the products, pricing and experiences that attract the consumers already buying regularly.
What could be your company’s equivalent to Toyota’s Prius? How are you uncovering core insights?
Next Steps: See how Spotfire version 4.5 empowers users to discover actionable insights hidden in big data and unstructured information in our upcoming webcast, “What’s New with Spotfire 4.5,” taking place Thursday, May 31 at 1 p.m. Eastern.