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February 9, 2009

Street Smarts

In the post Gut Versus Analytics: What's the Real Story?, Intelligent Enterprise's blogger Neil Raden riffed on an article from CIO Magazine citing takes on research by Accenture and Forrester.

The key sub-topic here is about vendors of BI and Analytics allegedly and programmatically prioritizing subjective instinct over objective calculation [my summary labels].

If that characterization of the choices is a left-vs-right choice (x-axis), I find it distracting and not as useful as a top-vs-bottom (y-axis) difference.

Namely, it seems almost always more useful to approach analytics as a way to take things apart, and BI as a way to put things back together. For example, it might really take only 4 (not 4000) data points to spot a trend, etc., but the magic would be in picking the correct four data points first. So wouldn't we expect "analytics" to help us pick the right four, and "BI" to tell us about their effects and co-effects? Do we need an industrial do-over to get tools orientated this way?

This relative difference is far more interesting than the difference between the brain and the gut, since in this view you get to use both organs on both the take-apart and put-together efforts.

Moreover, if the issue is really about "how managers decide what actions to take", then let's consider this real-world observation: actionable decisions and decisive action are not the same thing; the politics of the manager's position in the organization will sway things one way or the other.

Generally, the first decision made is about which evident problems the manager prefers to solve, whereas the first action taken is generally based on opportunity cost.

Those bases change from person to person and from time to time, but nearly all organizations try to implement some kind of policy or other standard(s) to bring about consistency in what is acceptable as "preference" and "cost".

The point is that the tension is not between the head and the gut; rather, it is between responsibility and accountability, each as practiced under the prevailing terms of risk and reward at the management venue.

Posted by Malcolm Ryder at February 9, 2009 11:01 AM