Redefining Business Intelligence: Don’t play the game, change the game!

November 2, 2011
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I recently saw the movie ‘Moneyball’.  The book was good and fit very well with my interest.  Now that it is more readily available via the movies, I have to once again recommend it to people.  I had recommended the book to some friends and they said “but I am not a sports guy”.  Good thing, this is not about sports.  It is a data analytics, making data driven decisions, and believing in your actions.

I recently saw the movie ‘Moneyball’.  The book was good and fit very well with my interest.  Now that it is more readily available via the movies, I have to once again recommend it to people.  I had recommended the book to some friends and they said “but I am not a sports guy”.  Good thing, this is not about sports.  It is a data analytics, making data driven decisions, and believing in your actions.

Without giving away the story, there was a good exchange between a few of the characters.  When questioned why they were doing what they were, one said, “if we succeed then we change the game”.  I liked that sentiment as over the years many companies have been recognized as “changing their game”.  I have been fortunate enough to be involved in quite a few of those stories.

Editor’s note: Rob Armstrong is an employee of Teradata. Teradata is a sponsor of The Smart Data Collective.

Examples abound such as Wal*Mart changing the retail industry and driving what is called the “glass pipeline”.  Harrah’s has been credited with changing the gaming industry and how customers are recognized beyond just a level or frequency of play.  Continental airline went from “worst to first” by looking at everything that effects the passenger.  You can look at just about every industry and you can see somewhere a company radically changed the rules about how that industry was run.  In each of those cases, it was the ability to see the business accurately, think about the business differently, and act upon the business in a timely matter than made the difference.

To help you change the game here are a few pointers:

1) Understand what you are trying to achieve

With the volume of data available for analytics growing everyday it helps to really understand what will help you drive your outcomes.  Of course the first question is what outcome are you trying to drive.  Is it profit, traffic, turnover, customer service, inventory management, or something else?  One customer I worked with had a goal of never being out of stock.  Nice goal but that would require a tremendous amount of inventory carrying cost.  As long as you are willing to accommodate that cost, you can meet the goal of no out of stock.  What is your outcome goal?

2) Get it down to one number

So what will drive that goal.  If you are working customer satisfaction then you have a wealth of data points and new ones being created constantly.  Do the tweeter feeds really make a difference?  Is the absence of calls to the hotline an indication of happiness (or frustration)?.  Do sales tell the story or is about the frequency and value of those sales?  The more you can isolate the real number that you want to respond to the better off you are.  Once that is known, then you can understand how other pieces of data fit into that “golden metric”. 

Paraphrasing an idea from another movie I liked , ‘City Slickers’, life boils down to that one thing and each person (company) has to figure out what that one thing is to them.

3) Classify and respond based on that number

So you know your objective and the measurement to determine success.  That is half the battle and sad to say many companies do not even have that clarity.  So now what are you going to do?  One first step could be to revisit your past segmentation and scorings. 

At one company they found that over half their customers changed “segment buckets” when they introduced a new, and more accurate, process.  In a scary finding, many of those that changed had movement of two or more deciles.  This means the old process was creating false indication to the customers worth.  This effected any marketing penetration as the company was promoting the wrong products to the wrong customers.

How are you directing your current actions?  Are you following up this action with timely understanding of how they changed the metric?  Do you have a closed loop process to identify, act, measure, and recalculate towards your one goal?

4) Execute, and believe, in your plan

This is critical.  Some ideas take a while to prove.  In the beginning there will always be a horde of people telling you why this is a bad idea.  It’s always been done a certain way, and everyone in the industry does it the same way, yadda yadda yadda.  If you do not believe in your plan then why should others?

To some people, they will never understand and not want to be seen as taking a “risk”.  It is true that many of the game changing moves do not fully succeed the first time.  People play the odds to be on the safe side.  Don’t worry about these people as success is the best revenge.  Of course you have to make sure they are not standing in the way of your success, and if they are you need to rectify that quickly.

If you have done your work, and know your industry, then take the chance and follow through..  Innovation and significant change does not come by doing what ever one else is doing.

5) Repeat

Of course the problem with being a game changer is that eventually everyone else figures it out and starts copying the innovation and the game has to be changed once again.  That is OK though as that is where the fun is.  Taking the line from another (baseball) movie, ‘A league of their own’, “of course it’s hard, if it wasn’t then everyone could do this.  Hard is what makes it great”

Are you content with just playing your game?  If not, then what are you doing to change the game?