One of the problems with analytics and business intelligence (BI) information is that these techniques do not always complete the task of solving a problem or moving to the next step of creating and realizing value. I refer to this as the syndrome of “What? So what? Then what?” My concern is that many organizations use analytics and BI to answer only the first question, but then they are stymied when it comes to answering the next two questions.
The power of converting raw data into information, which analytics and BI do so well, is progressing to answering the next two questions to increasingly add value for decision making with each subsequent answer. The “what? information is useful for managers and employees to more clearly observe and understand outcomes that may have never seen before. It reports the reality of what has happened. When they use predictive analytics, it reports the possibility of what will happen.
However, an obvious follow-up question should be “So what?” What do I mean by this? Answering the “so what?” question means that based on any bothersome or exciting observations from now knowing the “what?”, is there merit to making changes and interventions? How relevant to improving performance is the outcome we are seeing? But this leads to the more critical, and relatively higher value-added need to propose actions – to make decisions. This is the “Then what?” That is, what change can be made or action taken, and ultimately what then is the impact? For reasons that I do not fully understand, many organizations fall short of being creative or innovative in determining options.
There is a more thorny concern. Even when a change or solution is proposed, often the organization freezes. There is hesitancy. In the performance management framework an example is the reluctance to construct strategy maps, a balanced scorecard, or apply activity-based costing principles to calculate and report customer profitability. There is hesitancy to apply advanced forecasting methods. I refer to this as the “why not?” I have previously written that one needs to be a sociologist and psychologist to implement enterprise performance management methodologies. Just for starters it is human nature to prefer the status quo and resist change.
Until an organization gains mastery over validly answering all four questions, it will plod along and muddle through improving its performance rather than accelerate value creation.
Gary, You have a great talent to take concepts that are viewed by many people in management as disparate and organize them in an easily understood framework. This will help me as I work with clients on their value creation issues.
This is a great expansion on what we are already trying to do in our business, asking the “so what?” of our information. Challenging my colleagues with the “then what?” will be my new years resolution
Vince and Joe,
Thanks for the kind words. I appriciate that you also see part of the problem in getting adoption for enterprise performance methodologies … which is unrealistic expectations that just producing new and better information directly leads to better decisions. One has to take the next step and put the information in context of problems and opportunities.
Gary Cokins, SAS
Very good assessment Gary of organizational life in BI and analytics. I’m working with an internal client that want to do process reviews and I sucessfully convinced him that before picking one process to upgrade, maybe his first need was to answer to question “which one should I choose ?”. We are building upfront KPIs and strategic map (what)? to guide us to choose the first process to review (so what ?). Once choosed, we will look for options to upgrade the process, comparing changes and innovaitions to choose the right change (then what). But this type of client is rare, most of the time, I work to convince the organization to move forward (why not?). Status quo is very strong.
Perhaps the major reason for no follow up on “Then what”? is fear. Considering alternatives opens the road to choice (how beautiful is it to be in control?). Choice opens the road to making the wrong choice. Making a wrong choice is associated with failure, not with progress. Failure makes top managers miss their performance review and rewards.
Then, taking a wrong exit may well take a very long time to correct, albeit that reverting a downward trend may turn out to be the most rewarding. Everybody hopes that the single best alternative presents itself to them the moment they need it.
Worse, given circumstance implementing the best value added alternative might not include the decision makers. That for sure is a big reason why status quo is very strong. Perhaps it is that simple.
It is not for nothing that change quite often requires outside change agents (think of Confusius here). If only companies would be bold enough to employ them a little bit more sometimes…
Thanks for your interpretation of the “then what?” in my article. It is a new twist for what I meant, but I like it.
My meaning for the “then what?” is more mechanical and deals with managerial accounting. It is to first “test” a decion’s impact by applying marginal expense analysis and what-if scenario analysis to project the financial outcome of potential decisions. That way one can attempt to validate the wisdom of the decision.
But I like how you have interpreted it too.
Gary Cokins, SAS