Feeds:
Posts
Comments

Posts Tagged ‘process’

old-man

In the new normal, data has become the Holy Grail for making business decisions.  Everywhere you look the importance of data comes to the surface.  Marketing programs, websites, hiring practices, social media, finance, sourcing, and manufacturing, to name just a few, all rely heavily on data as a feedstock for decision-making.  Throw this data in to a computer and ‘presto,’ you have your answer.

As the world moves to the age of data scientists, data engineers, data analysts and data architects, I reflect on something I experienced many years ago that I believe remains true today.

I took a course at Massachusetts Institute of Technology in computer simulation of business strategies.  Part of the course was a three-day forecasting competition using the data of a real business.  We set up four groups.  Each group developed their own business strategies and entered the data into the computer system each night.  The next day we reviewed the results and decided on new input for the next run.  It was a financial simulation model that involved using random number generators and distribution functions that mirrored historic company data and performance.  At that time, this type of simulation modeling was very sophisticated.  It was like the data analytics of today.

One group who corralled at the back end of the class room, included an older gentleman (old man).  He didn’t say much but when he did, his questions and comments were measured and well thought-out.  On the final day, when we were comparing our results, he spoke up.  Out of the back of the room came, “It won’t work.”  What?  “Your models won’t work.  I just cut off your raw material supply.”  Silence.  Game over.  Using his 40 plus years of business experience, intuition, and knowledge of the industry, he made a human decision that trumped our models.  It didn’t matter what the data was saying.  I never forgot this experience.

I have built many financial simulation models in my business career and realize that in every fancy algorithm, there is an old man.  I believe he also exists in today’s data analytics.  –  Beware of the old man.

Read Full Post »

Radar

Everything that is going to happen to your business is already in the making, so why don’t you see it?

I recently read a somewhat scientific article on why we fail to seek risk, or opportunity. Simply stated, it is how you have developed the ability to process information and act on it. Your body does this naturally just to maintain its survival. Just watch animals, they have to be very good at processing information and acting on it or they won’t survive. What about businesses?

The article’s perspective was mostly biological, my perspective is much simpler. We have become very good at being dismissive of signals that are the early signs of change, both good and bad. Why is that? It is easier. Why spend time on things that don’t seem to impact the here and now. I can’t tell you the number of times I’ve talked to business people who stated that “I didn’t see this coming.” But when you dig into why they didn’t see it, in many cases, the early signs were everywhere.

I learned long ago that very few things just happen. There is a reason for their existence. You don’t have to dwell on every little thing that pops up, but you should hesitate long enough on those signals that sort-of get your attention. Think about them for a minute and ask yourself: What’s going on here? Is it going to impact me or my business? Do I need to get additional information? Should I keep my eyes on this for a while? I remember a regional sales manager dismissing a small foreign entry into a well-established domestic market by saying “it’s nothing.” Three years later they were a major competitor.

The value of this simple process is that it plants a seed in your thinking that becomes invaluable if the signal comes up again in the future; because when it does it most often will be in a different form. It also provides a perspective that challenges the opinion of others in your organization. How do you know that? Why do you think that?

The future is there to find, but you have to be in a constant state of awareness to have the best chance to be part of that future.

Read Full Post »

%d bloggers like this: