Why We Love Predictions So Much & 3 of Mine

Have you had enough of the look-backs at 2010 and the predictions for 2011? Apparently, most people haven’t, which is just as well, judging by the number of blogs and articles hitting my RSS feeds, Google Alerts and email box. Why do we love predictions so much?

Humans are unique in the animal world in that we can detect and make meaning from complex patterns all around us that result in decisions about how we should behave, think, live our lives and so on. Predictions – our own and others’ – are aggregates of these patterns so we find them confirming or interesting or sometimes just weird but we pay attention to them.

We have a strong need to exercise individual control, some of which is cultural and some of which is human. Getting a handle on the possibilities for the future, gives us a sense of mastery, self-esteem and even optimism. We tuck these predictions away in our memory banks and they become part of our pattern recognition process.

According to Dr. Shelley E. Taylor, a professor of Health Psychology at UCLA, “positive illusions” about the future are mentally and physically healthy; they improve the ability to care for and about other people and they increase the capacity for creative and productive work.

As predictions seem to be so important to our general well being, I’ll offer three of mine for the business environment:

• CEO’s will be more open to experimentation at work BUT these experiments will be verified by analytics. Managing risk is still hugely important in this fragile economy. Trust but verify.

• Social capital will become a key hiring criteria for positions that influence business performance. The quality of a person’s relationships will become as important as her experience and skill set.

• Customers will be more quixotic than ever and companies will make even larger technology investments to try to predict their moods, behaviors and buying intentions. Whether these investments pay off will depend upon:
• Business Strategy
• Organizational Culture
• Quality of Leadership
• Employee Fit
• The Right Data, Metrics and Analytics

As a recent blog from IBM stated, there is no ROI from Business Intelligence unless someone uses it to make decisions.

Happy New Year and let’s get 2011 started!!

What are some of your predictions for 2011?

5 Predictions About Analytics, 4 Tips to Get Started & 3 Cautionary Thoughts

This is the time of year for predictions and there is no shortage of them in the analytics arena. As business owners and managers are redoubling their efforts to find competitive differentiation amid tepid growth projections for 2011, analytics is seen by many leaders as a way to gain an edge.

There are a few key predictions that are shared by seasoned analytics champions and neophytes alike:

• Organizational data is proliferating at an alarming rate, both in terms of volume and complexity. How to make sense of all of this data will be a challenge for those not on the analytics bullet train.

• Desktop analytics will dominate the business environment, making large servers and high cost analytic languages no longer able to return the desired ROI.

• Mobile applications will be hot topics. Devices like iPads, smart phones and tablets will bring analytics into end users’ hands like never before.

• The gap between heavy analytics users and laggards will continue to widen and it will become apparent in areas like innovation and product development as well as bottom line results.

• Privacy regulations could make the collection of personal data more restrictive. At the same time, individuals may balk at the idea of how much of their private information is in the hands of third parties.

Michael Lock of the Aberdeen Group and Caroline Seymour of IBM’s Mid-Size Business unit have some helpful pointers for companies that are taking their first steps into business analytics:

Get Control of Your Data: This means bringing disparate buckets of data into a consistent environment so it’s easier for more people to perform multi-dimensional analysis.

Analyze Data in a Business Context: Data analysis in isolation provides no insight and therefore has limited value to the business. Analytics works for the organization when there is a business strategy to address outside pressures, an assessment of capabilities and analytical needs and the ability to use analytics across the organization.

Think Big – Start Small: This is what Michael Lock calls the Land and Expand strategy. Start with one unit or one pain point and work up to the enterprise level of data consistency. Match resources to the company’s budget.

Empower Non-technical Users: 77% of the Best-in-Class companies measured by Aberdeen Group have what they call “pervasive Business Intelligence with self-service usage”. Only 10% of the Laggards have it. End users have the business knowledge, the business context and the ability to create insight from data.

I’ve been involved in so many fads du jour, from reengineering to knowledge management. All of the concepts were stellar but became hijacked by (gasp!) consultants selling technology or off shoring services or some effort to gain short-term advantages. The problem seemed to be either that the ROI assumptions were inaccurate or that consultants rarely stayed around to see the business through the painful change that inevitably comes with disruptive innovations.

Now for the words of caution...

Leaders Drive Change. That’s what GE’s CEO Jeff Emmelt says and I believe him.

Culture Trumps Strategy. Becoming an analytics-based business means behaviors change across the board. This is often left off the To-Do list.

The Collective Mindset Needs to Shift. If data is a source of power in the organization; if people think they’ve been successful making “gut” decisions; if collaboration isn’t in your vocabulary, you have some work to do to build a successful analytics-based company. But, the rewards are going to be huge.