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How analytics can prevent rather than explain tragedy

Rob Enderle | June 20, 2016
Columnist Rob Enderle writes that we are far more likely to use analytics badly and suggests that IT should take the reins to ensure the analytics process is as effective – and free of confirmation bias -- as possible.

I saw this in action back when I was in competitive analysis myself. I was part of one of two competitive analysis sister groups. Our group was missioned to report as accurately as possible, but the manager of the other group found that he got more rewards by telling his management what they wanted to hear. The end result, we got defunded and the organization the other group supported eventually failed and was sold off.   There was clearly a right and wrong path, but the end result was that both groups lost their jobs. However, the group focused just on telling management what they wanted to hear did professionally better in the interim even though they contributed greatly to the failure of their unit.  

IT needs to play leading role in analytics use

I think the unfortunate conclusion is that we are far more likely to use analytics badly, with the end result being the failure of our firms, than in using it correctly to make better decisions.   Since it is line management that likely will make these very bad decisions it does suggest IT could play a role of ensuring this isn’t done or at least making management aware that the tool is being misused.  

IT, because it sits outside of the line management structure, could likely do this far better than some poor analyst in it and the end result would be a true value add for the firm.   And by focusing on process rather than the result, IT is less likely to get into a pissing match with the decision-maker who may not like that the analytics product has identified him or her as an idiot.  

Something to noodle on this weekend.  

 

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