The Iceland Volcano Ash – A Great Way to Validate Business Analytics

Like many business travelers my flight home to the USA was delayed several days due to the Iceland volcano ash causing cancellations of flights across Europe. I was not alone. I was stuck in Brussels. Now, of course, there are a lot of worse places to get stuck at. In fact, a week-end in Brussels would have been many stranded travelers desired choice.

For me, it turned out to be a learning experience. Three times I had the occasion to meet business travelers with the same predicament as me. In all three occasions in restaurants and hotel lounges I struck up conversations. Despite the perception you may have of me, I am normally shy. I like my solitude as I described in my recent blog Texting – Dangerous for Cars and Decision Makers Too. However, the conversations I had with other stranded travelers were educational.

Inevitably new conversations with business travelers leads to the standard questions of what do you do for a living and who is your employer. It always takes a little longer explanation for me since describing SAS, my employer, as a business intelligence and analytics software provider requires educating why organizations would spend money on solutions that solve complex problems. But it does not take long for people to quickly grasp the benefits that come from converting raw transactional data into meaningful information to improve decisions. Here is a summary of my takeaways.

Every business manager wrestles with eternal questions like these: What should we measure? How do we align employees’ behavior and priorities with the executive team’s strategy? How do we determine which types of customers are attractive or not to retain, grow, win-back, and acquire – and how much should we spend to optimize the valuable ones? How can we better forecast the future demand to reduce uncertainty and allow are planned actions to be more reliable and stable? What are the true profits of our products, service-lines, channels, and customers? Why do we feel the annual budgeting exercise is so broken and needs to be replaced with something that serves the same purpose – like rolling financial forecasts?

With some of my stranded companions, after a few cocktails, the conversation got more interesting. The discussion expanded to why their organization has not fully embraced and implemented techniques like statistical analysis (e.g., regression and correlation math), strategy maps, scorecards (KPIs), dashboards (PIs), segmentation analysis, risk management, text mining, activity-based costing, and others. My companions’ answers formed a consensus. The barriers are no longer technical (e.g., data quality) or weak skills to design the systems. The big barrier is social and cultural. One vice-president confessed, “Our executives do not have the willpower or guts to delegate decision rights to the managers and employee teams below them.” That is so telling.

Admittedly the pressures are high on executives to produce constantly greater results. Hence executives feel compelled to control the ship. But there is a difference between steering and controlling. I repeat what I said in my article More Spocky, Less Rocky. Successful managers lead with vision and inspiration. They answer the question “Where do we want to go?” By empowering their workforce with tools of analytics and enterprise performance management solutions, then managers and employees can answer “How are we going to get there?”