Analytics & Big-Data: Press 'Pause' on the Stairmaster


Our lives have become hectic. We are working harder and longer. We talk about life balance, but for so many of us we continue to have imbalance. Every once in a while we need to step back, press the "pause" button on the Stairmaster exercise machine, take some deep breaths, and reflect on just what the heck is going on. I'd like to share with you my take on what is driving the accelerating interest in analytics and big-data.

The two pyramids: 1) executive power and 2) information technology
In the middle 15 years of my now-40-year work career, I was a management consultant with Deloitte, KPMG, and Electronic Data Systems (EDS, now part of HP). In our slide presentations we always had two types of compulsory pictures: a pyramid with multiple layers and a four-quadrant grid. Each provided an oversimplified but effective way of communicating ideas. My explanation for the fast-emerging interest in analytics and big-data can be explained with the following two pyramids:

Executive power and influence pyramid. Savvy executives are realizing they must now delegate and distribute decision rights deeper down into their organizations to empower managers and employees. This is because with the exponentially growing mountain of data -- structured (numbers) and unstructured (text) -- and a speeded-up and volatile world, they can no longer hoard decisions at the C-suite level. The executives are at the top of a pyramid slide labeled "types of decisions." Their decision types are strategic ones. As examples: What is our organization's mission? What products and services should we offer to maximize value to our constituents? What altered strategic direction should we navigate our organization toward?

In contrast, at the lower levels of the pyramid are operational decisions that should be made by employees who ideally have had the strategy communicated to them by the executives (via a strategy map, scorecard, and dashboards). With expanding big-data, the base of this pyramid is widening, and executives are realizing it is futile for them to be able to explore, investigate, and comprehend this massive treasure trove of data. This is why the role of analysts (think "data scientists") is becoming mission critical. Executives cannot do it all. They must now delegate decision making and provide appropriate analytical tools and capabilities to their workforces.

IT pyramid. This pyramid is chronological from the past at the bottom to today at the top. At the bottom, say, around the 1950s, are the initial IT applications of basic and once time-consuming efforts of payroll and purchasing. Cutting bank checks. Then in the 1960s came invoicing, bookkeeping, and financial accounting IT applications. Next came the waves of customer relationship management, enterprise resource planning, and supply chain management systems. Higher pyramid layers involved information management and data warehouse technologies to enable the managerial systems. Then came the evolution of business intelligence highlighted with query-and-search drill-down capabilities. Next came business analytics, with a huge horsepower lift from high-performance analytics.

I would argue that we have now reached the peak of this pyramid, where executives, sitting at the top, can nimbly navigate the execution of their dynamic and constantly adjusting strategies with agility. Poor execution of a well formulated strategy is a major frustration and source of downfall of executives. This pyramid peak represents a GPS-like capability for executives at the helm to use metrics, performance measures and indicators, enterprise performance management (EPM) methodologies, and motivational methods to gain insights and drive the behavior of employees, customers, suppliers, and partners.

Where do we go from here?
Are there new, yet-to-be-constructed layers at the top of these two pyramids? I would argue, "No." Technology is no longer the impediment to driving improvement. It is proven. The obstacle is now people and behavioral change management. Increasing skills with analytics. Overcoming resistance to change. The two pyramids have reached their peaks.

The issues now involve strengthening the layers and making them more efficient and effective. The new, higher weight at the top of the pyramids needs a strong foundation, and this involves an organization's culture and leadership style.

Gary Cokins, Principal, Global Business Advisors, SAS

Gary Cokins is an internationally recognized expert, speaker, and author in advanced cost management and performance improvement systems. He is the founder of Analytics-Based Performance Management, an advisory firm located in Cary, North Carolina. Gary received a BS degree with honors in Industrial Engineering/Operations Research from CornellUniversity in 1971. He received his MBA from NorthwesternUniversity's Kellogg School of Management in 1974.

 

Gary began his career as a strategic planner with FMC's Link-Belt Division and then served as Financial Controller and Operations Manager. In 1981 Gary began his management consulting career first with Deloitte Consulting. Then KPMG (1988), where he was trained on ABC by Harvard Business School Professors Robert S. Kaplan and Robin Cooper, and in 1992 Gary headed the National Cost Management Consulting Services for Electronic Data Systems (EDS) now part of HP. From 1997 until recently Gary was in business development with SAS, a leading provider of enterprise performance management and business analytics and intelligence software. 

 

Mr. Cokins can be reached at gcokins@garycokins.com . His past SAS blogs are at http://blogs.sas.com/content/cokins .

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Analytics & Big-Data: Press 'Pause' on the Stairmaster

Technology is no longer the impediment to driving corporate improvement - culture and leadership style are.


More Data Than Time
  • 7/25/2012 9:13:38 AM
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Taking a look at decision making by superimposing the executive and data pyramids is an intriguing concept @Gary, and you've done a great job of explaining how one resource (executive acumen) is scarce while another commodity (raw data) is expanding exponentially.

I couldn't help but think of the ultimate finite resource:  Time.  Wouldn't it be ironic if the ultimate perk for executives turned out to be outsourcing their decision-making responsibilities so as to save their time for other things?

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