Our lives have become hectic. We are working harder and longer. We talk about life balance, but for so many of us we continue to have imbalance. Every once in a while we need to step back, press the “pause” button on the Stairmaster exercise machine, take some deep breaths, and reflect on just what the heck is going on. I’d like to reflect with you my take on what is driving the accelerating interest in analytics and Big Data.
The two pyramids – (1) executive power and (2) information technology
In the middle fifteen years of my now forty year work career, I was a management consultant with Deloitte, KPMG, and Electronic Data System (EDS, now part of HP). In our slide presentations we always had two types of compulsory slide pictures: a pyramid with multiple layers and a four quadrant grid. Both provided an over-simplified but effective way of communicating ideas. My explanation for the fast emerging interest in analytics and Big Data can be explained with these two pyramids:
Executive power and influence pyramid – The savvy executives are realizing they must now delegate and distribute decision rights deeper down into their organization to empowered managers and employees. This is because with the exponentially growing mountain of data, both structured (numbers) and unstructured (text), and a speed-up and volatile world, they can no longer hoard decisions at the C-suite level. The executives are at the top of a pyramid slide labeled “types of decisions.” Their decision types are strategic ones. As examples, what is our organization’s mission? What products and services should we offer to maximize value to our constituents? What altered strategic direction should we navigate our organization toward?
In contrast, at the lower levels of the pyramid are operational decisions that should be made by employees who ideally have had the strategy communicated to them by the executives (via a strategy map, scorecard, and dashboards). With expanding Big Data, the base of this pyramid is widening, and executives are realizing it is futile for them to be able to explore, investigate, and comprehend this massive treasure trove of data. This why the role of analysts (think “data scientist”) is emerging as being mission-critical. Executives cannot do it all. They must now delegate decision making, and provide analytical tools and capabilities for decisioning to their workforce.
Information technology (IT) pyramid – This pyramid is chronological from the past at the bottom to today at the top. At the bottom, say around the 1950s, are the initial IT applications of basic and once time-consuming efforts of payroll and purchasing. Cutting bank checks. Then in the 1960s came invoicing, bookkeeping, and financial accounting IT applications. Next came the waves of customer relationship management (CRM), enterprise resource planning (ERP), and supply chain management systems. Next higher pyramid layers involved information management and data warehouse technologies to enable the managerial systems. Then came the evolution of business intelligence highlighted with query-and-search drill-down capabilities. Next came business analytics, with a huge horsepower lift from high performance analytic (HPA). I would argue that we have now reached the peak of this pyramid where executives, sitting at the top, can nimbly navigate the execution of their dynamic and constantly adjusting strategy with agility. Poor execution of a well-formulated strategy is a major frustration and source of downfall of executives. This pyramid peak represents a GPS-like capability for executives at the helm to use metrics, performance measures and indicators, enterprise performance management (EPM) methodologies, and motivational methods to gain insights and drive the behavior of employees, customers, suppliers, and partners.
Where do we go from here?
Are there new yet constructed layers at the top of these two pyramids? I would argue no. Technology is no longer the impediment to driving improvement. It is proven. The obstacle is now people and behavioral change management. Increasing skills with analytics. Overcoming resistance to change. The two pyramids have reached their peak.
The issues now involve strengthening the layers and making them more efficient and effective. The new higher weight at the top of the pyramids needs a strong foundation, and this involves an organization’s culture and leadership style.
Nice post, Gary. For me, I think CEOs can get strategic advice that in one ear but then have techs and analysts provide a strong set of BI/analytics tools and the challenge is in the center – how does the CEO navigate the sources of data and analysis to gain insight within their strategy…this, to me, is perhaps what you are saying with the “increasing skills with analytics” comment. You can provide rich visual analysis to high level analysts or even the top spots in the organization but making sure they aren’t wasting time with those tools looking at the wrong things with respect to their strategic goals, to me, is a key challenge.
Eric. Thanks for the comment. I agree with you. My broad message is that having analytics competency may be most sustaining competitive advantage. Michael Porter’s popular strategy types are vulnerable in today’s speed-up and agile world. To your last point, “framing the problem” is key. I have written on this too. Google me and “framing” to see if an article appears. Gary … Gary Cokins