I am here at the New York Sheraton Towers Hotel, this morning and was just passed by someone in a formal waistcoat and other formal regalia – a veritable Rich Uncle Pennybags without tophat. I’ve been here many times before in my life, from its early days as the Hotel Americana, famous in business school lore because (per the case studies that were published), its builders (and investors) showed the acumen to ignore by-the-book investment analysis and bet big on a vision for what could happen if their instincts paid off more handsomely than the IRR models their analysts were using.
I’ve seen software vendors, consulting firms and others cite statistics showing that business managers feel they lack the data to make the important decisions they face. And, opine the sellers, that proves people should spend more money hiring more business intelligence specialists, more financial analysts, more analytical tools and platforms, better data warehouses and all of the other modern accoutrements that surround (at least part of) the art of making business decisions.
Speaking solely for myself, of course, I ponder the logic and reach a very interesting prediction:
- Whether firms invest enormously in the recommended ways or not, 10 years from now, the vast majority of business managers will still continue to feel they lack the data to make the important decisions they face!
The problem statement – executives lack the data they need – is a canard, a clever ruse, an attempt to delude through allusions to a state that is not to be achieved.
Does that mean that it doesn’t benefit firms to devote more resources to analytics, business intelligence, data warehousing, performance monitoring, management and alerting mechanisms and that they shouldn’t hire more consultants, read more case studies and repeatedly question their decision making processes to ensure they have the best possible data available? Of course not! All of this can be of assistance to the business.
But the data business managers really need does not exist! Because the easy decisions are conclusions drawn from historical data (and existing strategies). The hard decisions are the ones that require creating assumptions, scenarios and perhaps even visions of the future based on fragmentary, early indicators, weak signals, instinct, expertise-based early pattern recognition and “gut feel”. These are decisions about the future!
So while I wander by a huge convention-event here at this hotel, in search of breakfast, and gawk a bit at the outlandish clothes some of the speakers at a conference on investing in private real estate investment pools (or whatever it is they’re selling), I realize these outsized characters have something no BI tool, no enterprise information architecture, no performance monitoring model provides. They have a sense of the intangible variables that influence billions upon billions of dollars of investments. They are students not just of statistics and markets but also of human nature.
So if you really want to help senior business executives make better decisions, figure out what it is they need before investing in a new, better rear view mirror … or data warehouse.
We are big (with very good reason) on helping enterprises establish “one version of the truth” – but we aren’t very good yet at helping enterprises establish “one vision of the future”, particularly when that vision is at odds with the current zeitgeist.
What would Rich Uncle Pennybags do?
How do you think we can help enterprises tune their early detection systems? And their early decision systems?
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