We live in interesting times. Never before have we had so much information thrown at us. And yet never before have we been lured so much to believe or follow what we are told is trending.
It seems everything we do online has some element of presenting us with things based on the popularity of other people looking at it… whether it’s Facebook displaying a list of trending news articles or Google including click-through-rates as a factor in ranking search results.
Maybe I’m wrong to say we are unique… after-all the history of man is about 5,000 years and yet we’ve only believed the world wasn’t flat for about the last 500 years. Maybe humans have always followed prevailing opinions – until a lucky few explorers challenge things and seek to correct or change opinion with concrete facts. And it’s just that because “trending” is trending, that it’s really noticeable.
I believe that it’s part of the human condition to want to observe the world around us and make sense of it. We are always looking for patterns, for cause and effect, to make sense of what is happening. Sometimes we get it right and sometimes we get it really wrong. (If you want a humorous aside take a look at this 2011 article from the BBC that talks about this phenomenon and likens it to us believing if we wear our lucky socks we might influence the match outcome of our favorite sports teams. Go Figure: Why we think rituals can influence results )
So why on a business blog, am I rambling on about lucky socks and whether the world is round?
Because, I want us to be aware of this natural inclination to look for trends whether they are there or not, when we seek out business insights from our business data. And then use this as a warning to cross-check our conclusions or allow for a margin of error.
I think a lot of businesses don’t have the luxury of having Big Data. I wish there was a term Little Data to talk about how to do business intelligence when you either have a small group of customers or haven’t been engaging in a particular business line for a long time. We aren’t all Amazons that have enough customer behavior data to predict a need to ship stock to different fulfillment centers even before orders are placed.
So the business problem for most people is: how best to capitalize on the data that you have to make sound business decisions. Can Little Data still provide actionable business insights? I think it can if we also consider the following.
Are we looking for answers or looking for questions?
There is an appropriate time in business innovation and strategy planning to be looking for questions. I believe when we are looking at business data for actionable business insights we are best to keep in mind that we are looking for answers.
If you’ve read some of my other posts on analytics and metrics, you know that I advocate a test-measure-learn agile way of approaching them. That you need to start with a business goal, then engage in activities to support it, and finally, use the metrics to determine your success at achieving it. Once we have the measurements we can also do investigation and root-cause analysis to look further at the result to decide our next actions. But we are still using the original business goal as the yardstick.
As an example, we might be a clothing manufacturer who has created equal amounts of red and blue sweaters. When we look at the sales from last year, we see that we sold all the red and only a few of the blue. Some root-cause analysis might determine that red was the “it” colour last year. So this year’s decision on what to make might now consider looking into what is predicted to be the “it” colour next year. Or we may consider, can we influence the “it” colour for next year. Our analysis doesn’t mean we only make red sweaters from here on in.
Is it repeatable?
Are we taking actions, that once they are repeated come up with somewhat similar results? (Of course the sock wearers would also say yes, which is why we need the root-cause confirmation.)
I spoke with a business owner recently who had launched a beta mock-up version of their recruitment SaaS service. It was a two sided business model, with (paying) companies looking for talent and (free) talent signing on, with a unique way that they brought them together. Having only had a few employers sign up for the beta, they only completed one placement during the trial quarter. Yet because there seemed to be some organic sharing of the site on Pinterest, they had about 1500 creative professionals sign on to the site. In the words of the founder… we got about 1500 people without really trying.
A quiet voice inside of me had a few concerns. If they didn’t take deliberate actions to attract the talent, how do they know they will continue to attract even more talent? Or will it trend for a while on Pinterest and then interest fall off. If you didn’t actually deliver on jobs for these people, will you hold the existing subscribers interest? Having people sign up is a good thing, but real traction comes from a history of getting deals done.
The scary part of it was that the business owner also said that she was going to make a business change to narrow her focus on looking only at employers who had jobs for creative professionals. Maybe a good insight given she now had more of this type of talent signed up, but without knowing more about how engaged this segment was and whether employers for them were interested in the site, it could negatively limit her search for paid customers offering jobs.
Sometimes we are wrong
I believe that have to remember that although business intelligence can help guide us in our business decision making, there is always the possibility that what we may not achieve our goals
It’s a complex world and there are so many things out there beyond our control or factors that might influence our outcomes that we couldn’t see or consider.
The point is that having armed with some foresight based on the information that we are able to collect, we do make better decisions than if we have none. What we are trying to do with business intelligence is contain or limit the risks. But the risk is always there.
