Capgemini, a technology management consultancy, and researchers from The Economist recently polled 607 global executives about the use of data in their decision making. 65% of these executives agreed that business decisions are now based on “hard analytic information.”
That’s an easy statement for research people like me to critique, because it’s largely hyperbole and makes a good headline. Just what is “hard analytic information,” anyway? The fact is, data and data analysis has always been fundamentally important in making decisions. Companies have been analyzing data for a long time, and the study correctly describes how organizations are used to analyzing lots of internal data, such as data pertaining to sales, shipments and inventory. But there are several very important changes that have occurred that are putting data and data analysis front and center with executives.
One of the more important changes is that due to the digitization and tagging of much of the supply chain, internal data can now often be linked to external data about customers, markets and operations, enabling businesses to uncover patterns in ways they couldn’t have comprehended before. Being able to make decisions about resources and quantify the risk and implications of those decisions is incredibly valuable to executives. Another important change is in scale. The challenge in the past (I’m really dating myself here) was in overcoming the limitations of data collection, storage and processing capacity. In the last decade these limitations have mostly disappeared, and our need to capture, store and analyze large pools of data is a basic expectation, not just “nice to do.” In the agency world, this means our skill sets need to match this expectation. And this doesn’t mean simply hiring a statistician, it means changing your culture to embrace and adopt the application of data in everything you do; in every department and with every employee, instilling the belief that everything is data.
To do this, what do we need to learn?
- Measurement needs to be part of the project/creative brief, not an afterthought. The entire team must be aware of what will be measured, and when and how. This enables designers to construct media that is measurable and planners/strategists to design and capture data in order to analyze results and develop metrics.
- ‘Statistics’ is not a dirty word. Like it or not, measurement is going to be a part of every project, and we need to become knowledgeable and capable of discussing statistical concepts and outcomes. If you are an advertising executive and you didn’t take a Statistics 101 course in college, I have the perfect goal for your personal development plan next year.
- Realize that you will be capturing far more data than you will ever use, and that is good. This is very difficult for many of us to comprehend, because we are used to historical constraints of time and resource. The constraints haven’t changed, but access to data and storage can be fast and cheap. Computers can now chew through vast amounts of data quickly, allowing the exploration of many hypotheses rather than just the ones we could think to develop.
A colleague recently conveyed to me that he believed the secret to great insights was not in the specific data collected, but in the approach to analysis – being able to tie together the disparate pieces of a puzzle into a story that inspires and guides. I believe this is what this new era offers us: no longer being subject to only what we can think to ask or consider, but letting our analysis uncover patterns we didn’t know existed and constructing a story around that. That’s pretty exciting to me.