About gaining perspective on improving business performance using big data
Sometimes clients ask me whether Closed Loop or Analytics Based Performance Management isn’t just something for the large corporates. This made me thinking on my very first encounter with measuring performance and the use of big data. Or in that time just data.
With analytics based performance management I mean a closed loop improvement process in which the performance of a company’s strategy and objective is continuously is measured and improved. This by using (big data) analytics, leading to business decisioning and business execution. Followed by measuring and reporting, evaluation and back to analytics. Within BearingPoint we have dedicated tools and assets to support this closed loop analytics. See also the picture below for further clarification.
Now back to my memories … It must have been in the long and cold winter of 1996. At that time I was studying biology and I had a, ethological research study at the famous Emmen Zoo in the Netherlands. The study was about the reproductive problems of the Great White Pelican (Pelecanus onocrolatus). As generally occurs in zoos, eggs laid by great white pelicans in Emmen either disappeared or were broken. Thus the eggs were routinely collected for artificial incubation and rearing by hand. The ethological study was undertaken to try to determine why the pelicans could not successfully reproduce on their own.
An important part of the study was to collect an enormous amount of behavioral data by doing observations. In ethological studies this is done by using protocols and using statistical tools but I will not dig in this too deep. Furthermore we did desk research, site visits to other zoos and we used other sources of information like interviews with zoo keepers.
In short … We found serious differences between mating and paring in the natural habitat of the pelicans and the ones in the zoo. We assumed this was the root cause of our observations: little courtship behavior, disturbance of copulations, aggression, disturbance and choosing new partners for subsequent breeding attempts (while in wild pelicans are monogamous).
That’s why we suggested to build a more adequate and quit breeding area in the form of a separate breeding island. Furthermore it was suggested to try to habituate pelicans to intrusions into the breeding area. Afterwards we experimented with returning artificially incubated eggs to incubation pairs of pelicans sitting on dummy eggs. The results were clear; with bringing in a more natural habitat into their shelter some rest returned and the breeding success was raised. But we found new issue … after the eggs were hatched some parents showed problems with feeding the chick. And following the closed loop analytics cycle that led to a new research study the year after on the impact of food and especially the nutritive value of the food provided to the pelicans on the reproduction success.
While digging in my memories and looking back into my notes it surprised me on how well we used the closed loop analytics cycle to try to improve the reproduction success of the pelicans. I was just a student at that time and not aware of the important management literature.
So coming back to the original question whether analytics based performance management is only of any use for the large corporates … the answer is no. It can (or should be) used by any organization willing to improve its performance to meet the strategic objectives set. And the prove is already there … companies engaged in analytics do have a competitive advantage. And today’s availability of big data brings huge opportunities. That’s why I want to conclude with the following statement: “If you can’t analyze it, you can’t manage it”.
Parts of this blog were published earlier in ‘De Harpij’, a magazine for zoo staff in 1997 (year 16, number 3) and on http://financetransformation-nl.bearingpoint.com/