Derailing Your Supply Chain BI Project

September 1, 2014

ImageRegular readers of my musings know that I’m adamant about the crucial role that human intelligence plays in Supply Chain Business Intelligence and analytics.

ImageRegular readers of my musings know that I’m adamant about the crucial role that human intelligence plays in Supply Chain Business Intelligence and analytics. In fact, I recently quoted Jack Webb: “Just the facts, ma’am.” Data is dumb, Sergeant Friday is smart.

I think ol’ Jack was a fan of author Robert Heinlein. I know I am.

Again and again and again — what are the facts? Shun wishful thinking, ignore divine revelation, forget what “the stars foretell,” avoid opinion, care not what the neighbors think, never mind the unguessable “verdict of history” — what are the facts, and to how many decimal places? You pilot always into an unknown future; facts are your single clue. Get the facts!

Indeed, the foundation of every Supply Chain information system is the desire to let objective, relevant information drive action — in other words, to empower and enlighten workers about data and to make decisions after they’ve looked carefully at “just the facts.”

Unfortunately, all of this happy talk about focusing on facts presumes that we’re dealing with Homo Economicus (aka “Rational Man”) as if Rational Man were plentiful and in charge. Today I’m going to grapple with a far more common being — Irrational Man — we’ll call him Homo Irrationalis. Where Homo Economicus seeks out facts and is willing to be persuaded by them, Homo Irrationalis pays lip service to facts, but in reality the facts don’t matter, his mind is already made up. 

This is a paradoxical and interesting aspect of any Supply Chain intelligence implementation. You go to all this work to put in a system designed to deliver facts, but there are always those within a company who will never change their minds no matter how many cut and dried facts they’re shown. So knowing that this caveman (or woman) is coming to your implementation party whether he’s invited or not, you may as well be prepared.

Let’s begin with some facts about how humans are wired to dismiss facts.

An article on TechCrunch detailed a study performed by two researchers at OSU, R. Kelly Garrett and Brian Weeks, who demonstrated how in certain settings correcting incorrect information actually made people “more resistant to factual information.” Here’s the upshot:

Providing factual information is a necessary, but not sufficient, condition for facilitating learning, especially around contentious issues and disputed facts. As highlighted by this study, individuals are influenced by a variety of biases that can lead them to reject carefully documented evidence, and correcting misinformation at its source can actually augment the effects of these biases. Our goal is not to discourage future work in this area, but to suggest a variety of correction-presentation strategies the designers might use to help overcome these biases.

When I read “correction-presentation strategies,” I immediately thought of Supply Chain analytics role in helping companies make better decisions. No one implements Supply Chain business intelligence systems to verify what we already know — i.e., that 2 + 2 = 4. On the contrary, these analytics are supposed to help make sense out of complex correlations and causal relationships; to reveal patterns in a sea of data. But such pattern surfacing invariably touches on controversial topics and biases end up running amok.

One astute commenter on the TechCrunch article put it this way:

This article appears to reiterate a basic truth of cognitive dissonance theory: in order to reduce conflict (dissonance) with our previously-held opinions, we tend to ignore data that contradicts our mind sets. You can catch yourself doing this the next time you make a careless or badly-executed move in your car. Watch your mind as it attempts to minimize your mistake or displace your behavior on another driver. Then the next time another driver makes a similar error or inconveniences you, watch how quick you are to condemn their behavior. No wonder so many of our political and social judgments remain irrational.

Supply Chain Business Intelligence should reduce the number of irrational business judgments we make, but it can’t eliminate them because Homo irrationalis will always be with us. Knowing this, what should we BI champions do? Here’s my advice:

  1. Remind people that Data Doesn’t Kill Dreams. A Supply Chain Business Intelligence initiative is not a funeral service for their creativity. Quite the opposite, in fact. The insights they gain from BI will pave the way for the boldest, most creative options you’ve ever considered as a business.
  2. Disarm the barbarians. How? By publicly admitting that Homo Irrationalis lives in all of us (some more than others). Discuss the information you see with others and take away the element of surprise. When biases start to creep in, be willing to say things like “Hey team, remember we talked about how this might get emotional, and how we would deal with it…”
  3. Remind everyone how you got here. Lest we forget, the whole reason we chose to bring a Supply Chain Business Intelligence system in was the old “go with our gut” way wasn’t working as well as it used to. Why would we go back?
  4. Hold the trump card and be ready to play it if you have to. Make sure you get all the executive buy-in you need to bring BI in. More importantly, make sure you maintain that buy-in — you may need it to squelch an Irrationalis uprising.