Few company directors today have not heard about big data and what it offers. However, relatively few, according to a Deloitte survey, are being briefed on the best practices of leveraging and interpreting big data to realize actionable insights. The survey shows that less than half of public company directors have received training on how to communicate effectively with data scientists so that they extract from big data what is needed to improve a company’s performance.
Working with Big Data
Given the overabundance of data—inherent to “big data”—available to them, directors have increasingly found it futile to ask analysts for insights without taking the time to offer in-depth input to guide their collection and analysis. Many board members struggle to manage balancing this obligation with the demands of what is likely already a crowded schedule.
It is difficult to conceive the amount of data involved in providing directors with an initial analysis. Starting with massive quantities of ‘unscrubbed’ metrics—often from multiple different sources—the analysts begin to search for patterns and trends. It is from these trends that they are able to derive the materials to construct actionable intelligence.
Insights Are “Built”, Not “Discovered”.
Information alone, however, is not enough to produce an insight—at least, not one which can be expected to generate any significant value. It is the collocation of different pieces of information into insights that makes the analysis of data worthwhile.
On one hand, big data tells you everything you need to know. On the other hand, it tells you everything you don’t. In other words, “big data” does not equal “useful” data. The analyst must commit to the fact that board members care about insights first, intel second. You can send board members one hundred informative reports and a mountain of useful data, but if no one reads it, what’s the point?
Approach Insights as a Means of Persuasion
It’s a truism to say that board members are already occupied with their own ideas and tasks, and that they have little time to spare for additional ideas. They are already trying to sort through the masses of information that we all are confronted with today. To gain not only the interest, but the attention of a board member, insights must be carefully constructed to follow a logical structure capable of convincing them to take action. Even if it fails to do so, viewing each individual insight as its own persuasive argument is an effective way to ensure the intel impacts a director’s decision-making.
Continuing along with the idea of approaching the construction of insights as one might approach a persuasive argument, analysts and advisers will need to develop a logical flow when presenting the intel such that board members are left with a concrete takeaway to factor into their deliberations.
While, of course, it’s unfair to claim that the outcomes of boardroom-level decision-making rests on a GP’s storytelling chops, a well-constructed insight may compel a director to, at the very least, keep takeaways fresh in their minds for as long as is needed to take decisive action.
The approach is not dissimilar to how an attorney might construct or “make a case”. Just as a lawyer performs extensive research in support of their argument, advisers and analysts must work together to provide comprehensive coverage of a topic or issue. Failing to do so is also likely to suggest a failure to influence a director’s decision.
This is, again, important to attract and retain board member attention. A one-sided case will suggest bias at the origin of the “story”. Instead, a different expository logic can be used. It is somewhat similar to an academic statement of a research thesis and then the structured support of the thesis, along with the opposing case against it.
Consider Content and Context
What will distinguish this exposition is the broad context that can be supplied. Thanks to the vast number of sources that data collection makes it possible to interrogate, the breadth of context that can be referred to is very considerable. This gives far greater meaning to the results. Actionable insights are built with a greater frame of reference, with better targeted content based on a wider selection from identifiable trends.
What is also most useful is that content and context are taken from both internal and external sources. Clearly, management uncovers vast amounts of useful information in its daily operations – in particular, the front lines who are in direct contact with customers or clients, provide data that goes directly to marketing and sales. The analyst of Big Data should combine the trends that emerge from the corporate experience with those that provide patterns in the overall market or in the economy as a whole.
In fact, the combination of internal and external trends provides a unique perspective from which to formulate useful insights. One is not working from the somewhat narrow focus of the individual organization, but one is also not making broad generalizations that are difficult to apply in practice. This is a unique perspective that the data can provide which would be difficult to obtain via other forms of analysis. And the issues and solutions that emerge offer far greater value to the board.
But the data can provide even more – big data analysis can offer a perspective on people that adds an entirely new dimension to the analysis of these trends. Big data allows for extreme personalization – it is possible to look at a single consumer and see what his/her activity is, or it is possible to look at very tightly targeted groups of consumers or clients. These behaviours offer a new level of context, and the variety and depth with which they can be followed, combined with the trend analysis that we’ve discussed, brings the possibility of truly performative insights to the board.
With the prospect of board members getting the benefit of all of this value, the board can itself participate in guiding the work of the analyst and the data scientist. Boards can help by offering clear statements of purpose and mission, from which they can derive the right questions to ask the data. The board can share its needs and perspective with the data analysts and data scientists, and these can use that perspective to get the right focus on the information they select from the masses they review. This kind of collaboration makes for successful and performing organizations.