Introduction

Not too long ago, I had the pleasure of speaking to more than 400 statisticians and data scientists at a large annual conference. My topic: how to build a culture of analytics—something that is much easier said than done.

Here are some of the most salient lessons from my talk.

Recognize that It’s Never Been More Important to Be Paranoid

Nearly two decades ago, Andy Grove of Intel penned the very successful book Only the Paranoid Survive: How to Identify and Exploit the Crisis Points that Challenge Every Business. If you think that things have slowed down in the last two decades, think again.

But don’t believe me.

Right before stepping down as Cisco’s CEO, John Chambers told conference attendees, “40 percent of businesses… unfortunately, will not exist in a meaningful way in 10 years. If I’m not making you sweat, I should be.”

40 percent.

Lest you think that that number is overstated, have you been to a Blockbuster video lately? Do you own a Blackberry anymore? Had you heard of Uber even two years ago?

I didn’t think so. Disruption is happening faster than ever.

Analytics Cannot by Themselves Stave Off Disruption

Make no mistake: Understanding your customers, employees, users, and products are certainly important. Amazon wouldn’t be able to file patents for anticipatory commerce deep insights into who buys its stuff—and when.

Still, by themselves, a better understanding of customers et. al cannot entirely prevent disruption. Consumers (especially Millennials) have never been more fickle. What’s more, virtual barriers to entry such as cloud computing are far easier to overcome than their physical counterparts (e.g., telecomm infrastructure). Powerful analytics and insights can, however, shed invaluable light into emerging trends and patterns. The most successful companies of today and tomorrow will be equipped with—and act on—that information sooner rather than later,

Building a Culture of Analytics Takes Time

In my talk, I described an organization for which I used to work. Call it Acme, Inc. here. I didn’t last too long at the company primarily because it refused to use analytics to make better business decisions. I cited an example of how the recruiting department intentionally ignored my findings that we were wasting money by recruiting at Ivy League schools.

A decade after I left Acme, it was still struggling with analytics. My remaining friends there confirm what I had suspected: Many if not most of its important corporate decisions stemmed from gut feel—and not the very analytic rigor that would improve its bottom line.

E-Mail Is Not a Collaborative Tool

Finally, a client of mine six months ago had me speak at company headquarters about the need to improve internal communication skills. It turns out that most employees were drowning in a inbox tsunami with no end in sight. In one example, two teams from across the globe battled for two years over a thorny data issue.

Building a culture of analytics isn’t easy.

When the two groups met in person at a conference San Francisco, they solved that thorny problem in under an hour.

Sound familiar?

Simon Says

Building a culture of analytics isn’t easy. For every Amazon, Netflix, Facebook, and Google, there are hundreds or thousands of others that don’t get it. Heed the advice in this post, though, and your organization will start making better decisions.