House of Cards

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I recently heard a great news story on National Public Radio on my way home from work that intrigued me and I thought I’d share with my one reader.  Specifically this article talked about metrics used by the hit Netflix show House of Cards.  Netflix is a great company to work for if you are a data nerd as they have extremely granular data not only of their customer demographics, but also, and more importantly, of their behavior and treatment of your product.

You’d think an organization with that much data, and a well-earned reputation for data savvy management, would pass those insights on to their production and development teams so they would know the best loved characters, how plot lines were received, and other critical information.  So how much does Beau Willimon, the show’s producer and creative driver, see?  Well, in his words: “I know virtually nothing.”

Wait, how does that happen?  This is Netflix, one of the major companies in the middle of the big data revolution and their hottest product right now is being run by a guy who doesn’t see any of that data?  This flies in the face of everything we know and love about data!  Aren’t we supposed to be running our business off of every data stream we can find?

I loved this story because it illuminates some very important facts about big data and how it should be actually used.  The first is that the data itself can be both a great tool…and a great detriment if you’re not careful.  As the interview continues, Mr. Willimon explains that he doesn’t want any of that data either.  He doesn’t want the distraction for his team of creative types and that kind of detail would have them second guessing each and every creative decision that they made.
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Interestingly enough, we see that Netflix made this same decision.  They guaranteed Beau an extremely generous run of 26 episodes without seeing the first one.  By giving Mr. Willimon that promise, he was able to develop a rich canvas of characters and plots that don’t feel rushed or extreme.  The bread was given time to rise!  In contrast, new shows often have extremely short leashes with many being cut long before they complete their first season based on a few poor ratings.  The ability to focus on the product and not the numbers gave his team the creative freedom and also the peace to do the best job they could, without looking over their shoulders constantly.  They didn’t have to pander to their customers (us) with every episode but instead could, as master craftsmen, make the best product they could.

What Netflix understands is that the data itself is a representation at best of customer behavior, not of the quality of the product itself.  So as they created this series, they needed to focus on making a great product, independent of anything else.  Measuring the customer’s behavior and treatment of the product is important to know when choosing new products, marketing, and other activities; but you simply can’t try to create the product itself based on these data points.  Could you imagine Leonardo da Vinci stopping every paint stroke, to get the approval of and seek direction for his next stroke, by a gallery of people behind him?  What a mess the Mona Lisa would be!

We must never forget that people aren’t machines, constant, unending feedback loops dampen creativity and destroys vision and strategy.  While we should use these tools and technologies to shape behavior and help people maximize their limited resources, we shouldn’t get lost in the fact that they are indeed people who need room to be creative and experiment.  We often complain about reports and data being ignored by management when making decisions, that’s not always a bad thing.

The trick to a successful business is to find the right balance between usage of the data and quality decision making by a focused and knowledgeable management team.

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I’ve have a few interesting experiences from this past big recession that are neither unique to me or really all that shocking so I thought I’d blog about it to no one.  Specifically when companies face financial hardship they make…interesting…decisions.

One recent experience was that company missing its revenue targets responded by getting rid of the ice machine in the break room and cutting back on janitorial services.  Mind you the garbage piled up in the break room was annoying, but the real issue was the bathrooms which ran out of paper products and became rather horrid after 200+ people used them all day.

Another company responded by removing alternating light bulbs in the hallway florescent lighting and turning the air conditioning down.  Keep in mind, in Arizona it can get a bit warm during the summer, so that matters.  I suppose they thought by removing the light bulbs they would reduce the heat they produced and thus would need less AC.  I’m not sure about the heat balance formula, but it didn’t work.

The money that was saved by these executives was completely inconsequential when compared to the loss of productivity of people who now pretty much gave up on the company and spent their entire days looking for new jobs and complaining to each other.

I wonder what the executives who made this decision thought about the consequences of their actions.  Did they really think that no one would notice or care?  It reminds me of the recent comment the Sergeant Major of the Marine Corps (top non-commissioned officer) Micheal Barrett made to Congress that Marines cared more about better equipment than pay and that lowering pay raises would “improve discipline”.
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I’m not entirely sure what Sgt. Maj. Barrett what was trying to say, and I don’t feel the need to even write about his half-hearted “clarification”, but it certainly makes him look like he couldn’t care less about the people below him.  Certainly every Marine out there had that opinion.  Likewise when executives at the aforementioned companies made their decisions they are basically saying we don’t care about how this affects anyone because everyone will just follow my orders and that’s all there is to it.

The problem of course is that people are…people.  We have emotions, feelings, fears, hopes and dreams.  The biggest mistake leaders can make is to ignore this and pretend that they can simple cause things to happen by edict and that every decision is compartmentalized and that taking out the ice machine will save $1,000 for the company and that will go straight to the bottom line.

So why this on a BI blog…well, because BI is about more than the bottom line.  One of the first things BI professionals should understand is that numbers mean things and that while they reflect human behavior they do not directly cause it.  They certainly influence the decisions people make, but people are complex creatures and you can’t pretend that they won’t react the decisions you make in unexpected ways.

The solution of course is to treat your employees as a part of the solution and not just a cost.  If instead of cutting off the lights in the hallway the company instead put out a series of KPI’s and asked employees to help design solutions for moving the needle on them?  Rather than cut the toilet paper supply off, put together a gamification model for increasing cash flow?  If the best idea to save money the CEO came up with is to cut the AC then perhaps we’ve identified the actual problem!

So help me out, I’m on the only one seeing these things?

Emotional Intelligence

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Human_brain

Is it Possible to Teach BI?

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Can you teach emotional intelligence (EI)?  That was the title of an interesting article I came across recently.  Emotional intelligence is defined as the ability to identify, assess, and control the emotions of oneself and others.  Where EI comes from is typically defined in one of two major theories, or as a hybrid of the two.  The first theory is that EI is the ability to have an understanding of one’s own and other people emotions.  This theory implies that EI can be taught and that it is a skill that some people might be born with an inclination to do well in, but it must be honed and developed over time.  Likewise, it can also be forgotten or overridden by other actions and behaviors.

The second definition considers EI a trait or characteristics of recognizing other people’s emotions and that EI is ultimately a primal characteristic which isn’t trainable and can’t be expected to increase or change very much over time.  In this view, if I was born with a very low EI, while I might act like I have a high EI in how I treat others, it is just an act and indications which suggest otherwise is just a coping mechanism I’ve developed.  But I still don’t appreciate others (or myself) I just am acting a certain way to get what I want.

The article mentioned earlier suggests strongly that EI is more an ability than a trait.  The researchers in this study are trying to teach little children in school how to identify emotions and how to control and manage them.  If they are correct, and EI ends up being a good predictor of future employment/school performance (another big question being debated and studied) then we can expect this to be added to future curriculums for schools nationwide.

As you likely already guessed it really made me ask the question, can business intelligence (BI) be taught?  Can it be taught to people alone or to organizations as well?  Is BI just a technical implementation of curiosity and data based decision making and thus is an innate trait or can BI be developed by teaching these skills and attributes to people and companies?

I like thought experiments, so here’s my take at answering these questions:

When I go into a new company, I almost instantly can determine if their “BI” department/organization is just producing operational reports or if they are truly using and creating BI.  It is usually quite simple to see that second level of value in providing that imagination and what-if type answers to an organization hungry for a better understanding of their business and the world around them.  Even with companies with immature BI technologies you can find Excel spreadsheets that define BI in every way even if it is not the best technology to implement it.

Based on that experience, it would seem that BI can be forced on people but if they don’t have the inclination to use it to its potential we should consider BI to be a trait.  People who read this will instantly say, well budgets and other projects and…but that’s the point I think, if it is not a priority then it isn’t a priority.

On the other side of the coin, I’ve been with companies that started off with seemingly nothing, but with training, even hardened “old-school, gut based” decision makers start asking for data to help them craft their strategies and decisions.  Many consultants that I’ve worked with over the years, including myself, started out as non-technical resources and over time have developed the skills to provide high quality BI solutions and perspective.  These examples suggest that BI is an ability that can be harnessed and trained.

I suspect that if you really thought about it, every company would have a little of both as far as examples go.  I am the eternal optimist and I think that companies and people can change and grow, but I don’t think it is as easy as just installing the software, regardless of what a vendor might promise you.  To develop this BI mindset and competency I think it takes time and energy and no small amount of stubbornness.  If you don’t already have a BI competency, you’ll need deliberate plans and a focused management to change the very core of how people think and how they treat one of their most valuable assets…data.

I suppose I don’t have a profound or easy answer on these questions, but it does beg for analysis and quite frankly some honest discussions in every organization.   Here are some questions that might help get the conversation rolling:

  • Do you have users or an organization that seeks out knowledge before making decisions or do they simply run reports and enter the values into an endless sea of spreadsheets which simply record what they did?
  • Do your users see their reports and dashboards as check boxes required for their jobs or do they interrogate the data to find out what questions they should be asking?
  • Does every new tool or process have an advocate asking how we do something with the data that comes out of it, or does everyone just assume that the “reporting will be there”?
  • What are you willing to give up in order to become that data-driven organization you read about in the magazines and blogs?

In the end, every question must have a follow-up question, what if?

Be Unafraid

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Lion waiting in Namibia

You don’t have to feel safe to be unafraid. For those unfamiliar, that is a line out of the chorus of the song Lions! by Lights. The refrain might have been written for me and I’ve been reflecting on it lately as I make the transition from an employee of a consulting company to an independent consultant.

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I’m looking forward to this new chapter in my life and the birth of Ascension Business Intelligence LLC with all of its risks, fears and opportunities that will come along with it. So wish me luck and give me a hand while I move forward without fear, even if I don’t feel safe.