Want the most benefit from analyzing big data?

Want the most benefit from analyzing big data? Don’t overlook this important factor that the successful companies know.

If you don’t read at least once a day about how Big Data Analytics will create insight that will, apparently miraculously, lead to better decisions, a more competitive market position and improved business outcomes, you must be living on Jupiter. Actually, I do live on Jupiter (Street) and I find myself relentlessly barraged with this overly-simplistic claim.

I recently read an analysis of the incredible rise and fall of computer industry icon, Digital Equipment Corporation (DEC). In it, the author makes an interesting statement, “The first and most important lesson that I learned in the years subsequent to this diagnosis was that insight does not necessarily produce the right kind of action.” (DEC is Dead, Long Live DEC, Edgar H. Schein, 2003)

As Sloan Fellows Professor of Management Emeritus at the Sloan School, one of the founders of the field of organization development, and author of 14 books on organizational psychology and corporate culture, Edgar Schein is an undisputed authority on corporate behavior.

Schein’s observation is that critical information surfaces, is discussed, analyzed and then rationalized away. He says that too often we assume in management literature that if people could just see what was going on, they would act to fix things; that insight leads to action. But in fact, as he notes in the book, “one of the deep lessons of cultural dynamics is that if the remedy would require an organization to violate some of its deeply held cultural assumptions, that remedy will not be applied.  Instead, the organization will rationalize that what it is doing will work out in the end, or it will apply quick fixes and organizational Band-Aids that provide an illusion of problem solving.”

I doubt there are many, including those of us who live on Jupiter, who have not seen this occurrence in our own organizations. But for Billy Beane’s Oakland A’s experiments in 2002, would anyone in Major League Baseball have applied insights gained from Bill James’s data analysis that he’d written about since 1977? (reference: Moneyball, Michael Lewis, 2003)

The truth is that companies have been analyzing data in one way or another for decades. It’s true that today’s technologies and techniques allow more of us to analyze more data than ever before and do it faster. But technology has always been evolving, with analytic capabilities and data volumes increasing over those decades. Why, all of a sudden, would we think that the application of today’s analytic capability applied to current data volumes and formats would cause a wholesale upending of human nature when it never has before?

There is more to becoming an effective data-driven company than collecting and analyzing data, “big” or not. The organizations that benefit most are those who carry out the complex process of selecting appropriate applications based on business needs; quantifying objectives; not just collecting data, but integrating it in a meaningful way; developing applicable business models and analytic algorithms; and incorporating resulting insight into existing business process. And they are those who are prepared to overcome cultural, organizational and process challenges as well as implement new technology.

As an underwriter of the International Institute for Analytics, Dell works closely with IIA, the only research firm dedicated exclusively to defining the path to analytics excellence, in fostering best practices for competing on analytics. An example is the upcoming Chief Analytics Officer Summit 2013, June 18-19, where Dell will be a speaker.

About the Author: Vickie Farrell