Watch Out Your HiPPOs Don't Trample Big-Data!


We -- and I'm speaking universally here -- love to talk about big-data . It's great and glorious in its transformative capabilities, we all agree. But hold on a second, now, let's not get ahead of ourselves.

If you're talking about the technology backing the big-data revolution -- the high-performance computing and advanced analytics software, for example -- then, OK, yes, talk away. But you've got to stop a minute on the organizational challenges that come with big-data, Andrew McAfee, author and principal research scientist at MIT, told attendees at his keynote address at the SAS Global Forum Executive Conference taking place in San Francisco this week.

"I'm not confident that a lot of companies are going to be able to make the switch in running themselves effectively in this era of big-data," McAfee said.

His reasoning: The HiPPOs aren't going quietly.

"The what?" you're probably wondering, as I was.

In McAfee lingo, a HiPPO is the "highest-paid person's opinion." Even companies that consider themselves data-driven businesses typically operate as such today: They gather relevant data, do their analysis, then turn to the HiPPO in the room and have that person make the decision. HiPPOs rely on "what's in between their ears," their guts, or their instincts. They've gotten there because of their track records, their resumes... because they can command the room, McAfee said.

Now, enter the pencil-necked geeks with their analytics software, said McAfee (with the greatest of affection). The real big-data challenge is in letting the geeks -- the data -- really drive the decision making, even if it doesn't correspond with the HiPPO's intuition.

This is a common theme we hear, but McAfee warns that the hostility from HiPPOs is not to be underestimated. Resistance can be nasty, he said, citing as one example the now-famous Nate Silver and his spot-on accuracy in using poll data to predict the 2012 presidential election. In advance of election night, traditional election pundits -- i.e., the HiPPOs -- minced no words on how utterly wrong they thought Silver and his numbers would be. Whoops.

It's a bit confounding that we listen to HiPPOs at all any more, but alas, they lurk everywhere. "When we've got data, and build decent models, you'll always get a better judgment than if you rely on a HiPPO," McAfee said.

But McAfee says we shouldn't wish HiPPOs extinct. We should consider them in new roles. These are the experts who know the organization's biggest challenges and know what questions to ask. He quoted Voltaire: "Judge a man by his questions, not by his answers."

In addition, the geeks should be using HiPPO predictions, judgments, and forecasts in their algorithm, he suggested. This is the polar opposite of what happens today at most organizations. Geeks, who aren't known for their subtlety, he noted, need to play more nicely. They've got to say, "OK HiPPO, tell us what you think will happen, and we'll build that into our models."

Only then, McAfee suggested, will organizations truly move themselves to a data-dominated decision making style.

Gut vs. the data. Which side of this divide does your organization stand? Share below.

Beth Schultz, Editor in Chief

Beth Schultz has more than two decades of experience as an IT writer and editor.  Most recently, she brought her expertise to bear writing thought-provoking editorial and marketing materials on a variety of technology topics for leading IT publications and industry players.  Previously, she oversaw multimedia content development, writing and editing for special feature packages at Network World. In particular, she focused on advanced IT technology and its impact on business users and in so doing became a thought leader on the revolutionary changes remaking the corporate datacenter and enterprise IT architecture. Beth has a keen ability to identify business and technology trends, developing expertise through in-depth analysis and early adopter case studies. Over the years, she has earned more than a dozen national and regional editorial excellence awards for special issues from American Business Media, American Society of Business Press Editors, Folio.net, and others.

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Re: HiPPOs Unite!
  • 5/1/2013 7:54:58 AM
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Terrific point Wendy: Re; How many of us were actually allowed to offer up data or analysis to our teacher(s) that was something other than the pre-programmed answer he/she was expecting (college notwithstanding)?

Re: HiPPOs Unite!
  • 4/30/2013 1:09:12 PM
NO RATINGS

I see two things increasing the likelihood:

1)  Proof that this kind of decision-making (=use of thoughtful, diverse, analytical input coming from various levels within a corporation) has direct impact upon profitability.  Employee-owned firms with participative decision-making styles and processes are a good source of data; in fact, the compelling case has been made that these firms are more profitable than their non-employee-owned counterparts;

2)  The transformation of education as increasingly decentralized, Khan Academy-like, with the cost savings alone making the 100+ year-old Prussian command-and-control method increasingly obsolete.  How we organizationally relate to one another is shaped so much by the school experience.

How many of us were actually allowed to offer up data or analysis to our teacher(s) that was something other than the pre-programmed answer he/she was expecting  (college notwithstanding)?

 

 

Re: HiPPOs Unite!
  • 4/30/2013 12:05:18 AM
NO RATINGS

How likely is that Wendy?

Re: HiPPOs Unite!
  • 4/29/2013 8:11:02 PM
NO RATINGS

The HiPPO/Data Scientist relationship mirrors a power dynamic repeating itself throughout history--that of the "Warrior King" and the "Priestly Advisor".  Defending the gold at all costs, the Warrior King, on high alert, is intuiting, anticipating, predicting, expecting--and the adrenaline can easily turn into impulsiveness.  Savvy Warrior Kings look to Priestly Advisors for lay of the land, battle intelligence, fact-checking--and an ability to play devil's advocate.  If this open exchange of information, this level of active discussion and dialogue were to become SOP, imagine the impact upon decision-making.

Re: HiPPOs Unite!
  • 4/29/2013 5:45:54 PM
NO RATINGS

He who has the gold sets the rules

HiPPOs Unite!
  • 4/29/2013 4:47:32 PM
NO RATINGS

McAfee is right, HiPPOs shouldn't be put out to pasture, thrown out with the bathwater, or pushed down the Dodo evolutionary paty. They can bring a lot to the discussion, like he said, for knowing the questions to ask. However, you first have to ask the Highest Paid Person's Opinionator to keep his answers to themselves and cut their compensation in half. Good luck with that.

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