The Big Picture -- A CEO Allegory

BI Review Magazine, November 29, 2006

Imagine a Global 500 company in which the board of directors has just appointed a new CEO. Among his many priorities, he wants to address the board's perennial interest concerning the ROI of technology, especially the new area of business intelligence, or BI.

To understand business issues and to prepare vignettes for the board to help them visualize how BI investments are being used, the new CEO invites each division president to prepare a presentation on a way they used BI to drive effective decisions in the last six to 12 months. He asks them to share: (1) the key data as it was presented, (2) the decision made, and (3) the results of the decision implemented. Furthermore, he asks them to come with live access to the data and their BI analyst to "drive" the technology.

Responding to such a challenge is a double-edged sword. While it clearly gives the division presidents high visibility, the exposure may be less than flattering. The new CEO comes from a background in scientific research, he is known to move smoothly between details and the big picture, and his reputation has preceded him for being searingly incisive in his questioning and analysis. Revealing errors during this process may not ruin a career, but is an embarrassing, short-term blow to one's stature. Years after such an experience, though, it is said that many people have thanked him for the lessons they learned.

As we review one of these presentations, can you spot any sensitive issues before the CEO does? Further, can you predict the plan that our CEO will propose after this process plays out?

The Division President's Presentation

"This graph, prepared by our BI staff, is a powerful example of how technology helps support our decision-making and how it helps us measure the impact of management decisions we have made. A little less than a year ago, our BI manager showed me an earlier version of this graph. It was similar to this except without the data for this past year, shown on the far left of the chart."

Figure 1: The Employee Population Profile (As presented)

"The chart shows the number of employees currently working for us, and the number of years they have been with the company since they were hired. We noticed clearly the trough you see on the right side. Our BI team suggested that the trough probably indicated the departure of employees who had been with us for seven to nine years, and implied that this trough was caused by a lack of promotional and career enhancement opportunities. Using this vivid graphic in support of our management decision-making, we sent a directive to our management, worldwide.

"We asked our management to defer making external new-hires and to promote from within.

First, this approach would help address the issues identified by our BI team.
Second, we told them how this deferral of new hiring would provide a major financial boost to the corporation in difficult economic times. Third, we suggested that, if voluntary action was not sufficient during this fiscal year, we would need to consider more formal actions next fiscal year.

"While this fiscal year is not quite over, I am pleased, and proud, to show how our management has responded. Notice the dramatic drop-off in external hiring within the past year, as shown on the left side of this graphic prepared by our BI team.

"Clearly, employees of all educational backgrounds now have improved opportunities for promotion and career enhancement. We can be proud of how our management, worldwide, has responded to this important problem. Moreover, we can be proud of having a talented and dedicated BI staff with the skills and ability to identify an important problem like this, to support our decision-making, and then to help us clearly measure, and present, the results of the management decisions we have made."

The Non-Existent Data

On his way to understanding "the big picture," the CEO began asking detailed questions. "The employees represented in the space between the first two labels on the horizontal axis have been with us more than 'Less than One Year' yet less than 'One Year'; how does one get in that category?"

Realizing the impossibility of this, the division president's pride turned to chagrin as he turned to his senior BI analyst for an explanation. "Well, sir," began the analyst, "our BI tools are very good and we can aggregate and disaggregate our data any way we wish. From a management perspective, it seemed important to understand five major categories of employees, those who have been with us 'in' each of the labeled groupings on the chart [<1, 1-3, 4-6, 7-9, 10+]. So, actually sir, there is no data 'between' those labels on the chart."

Nodding in agreement, the CEO went on: "Then why do you show an inflection point [a point on a curve where it changes direction from going up to going down, and vice versa] just to the right of '1-3 Years' and to the right of '7-9 Years'? How can there be an inflection point where there is no data?"

The Inappropriate Curve

The BI analyst, stumped for a moment, recovered quickly: "Ah, yes, the first version of this chart was with straight lines, like dot-to-dot, but the BI team did not think that was nice enough to bring to the management committee, so we chose the option in our BI software to run a spline curve over the data. Let me show you how bad it looked before the spline curve." Figure 2 is the chart he displayed, which also highlights the fact that only five data points exist for each of the five 'curves.'

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