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Leadership with Business Analytics – Nature or Nurture?

What distinguishes strong leaders? This raises the subsequent question whether leaders are born with the innate trait or if strong leadership characteristics can be cultivated. It is the classic “nature versus nurture” debate. In considering this, I began to wonder whether business analysts within an organization could move beyond a support role and become be leaders, similar to C-level executives? A provocative talk by Alan G. Dunn, president and founder of GDI Consulting and Training Company, provided some answers. I share some of Dunn’s thoughts in this column.

Three Primary Success Factors for Effective Leaders

One person within an organization can make a big difference. An effective leader is often someone who intuitively understands the big picture and strives to change the fabric of an organizational culture not through mandating change but by engaging and motivating others,

In his talk, Dunn referenced studies concluding that the three primary success factors for effective leaders are technical competence, critical thinking skills and communication skills.

When a leader says, “I don’t do that; I have people who do that,” you know there is a problem. Good leaders may not necessarily be born with high intelligence or innate abilities and they may not have extensive experience. But good leaders possess problem-solving skills.

The Ford Motor Company’s CEO Alan Mulally came to the automotive business from Boeing in the aerospace industry without deep automotive experience, yet he has been successful. Why? Because he is an analytical type of leader.

Generally speaking, analytical leaders have a tendency to be adaptable and possess systematic and methodological ways to achieve results. It may sound corny, but they apply the “scientific method” that involves formulating hypotheses and testing to prove or disprove them.

A major contributor to the scientific method was German mathematician and astronomer Johannes Kepler. In the early 1600s Kepler’s three laws of planetary motion contributed to the beginning of the Scientific Revolution. His three laws made complex concepts simple and understandable, suggesting that the seemingly inexplicable universe is ultimately lawful and within the grasp of the human mind.

Kepler did what analytical leaders do. These days, the most accomplished analysts are referred to as data scientists. They rely on searching for root causes and understanding cause-and-effect logic chains. Ultimately a well-formulated strategy, talented people and the ability to execute the executive team’s strategy through robust communications are the key to performance improvement.

Key Characteristics of the Analyst as Leader

The popular “Moneyball” book and subsequent movie demonstrate that traditional baseball scouting methods (e.g., “He’s got a good swing.”) gave way to fact-based evidence and statistical analysis. Similarly, commonly accepted traits of a leader, such as being charismatic or strong, may also be misleading.

Dunn’s research revealed that human ability and competence is the scarcest resource in an organization. That is why organizations should develop programs for skills growth for each of their employees. But sound competencies is not enough; key personal qualities complete the package of an effective leader. For the analyst as a leader, three personal quality characteristics are needed: curiosity, imagination and creativity. The three are sequentially linked. Curious people constantly ask “Why are things the way they are?” and “Is there a better way of doing things?” Without these personal qualities, innovation will be stifled. The emergence of analytics creates opportunities for analysts as leaders.

Weak leaders can be prone to a diagnostic bias. They can be blind to evidence and somehow believe their intuition, instincts, and gut-feel are acceptable masquerades for having fact-based information. In contrast, a curious person always asks questions. They typically love what they do. If they are also a good leader they infect others with enthusiasm. Their curiosity leads to imagination. Imagination considers alternative possibilities and solutions. Imagination in turn sparks creativity.

Creativity is the Implementation of Imagination

The primary mission of good analysts is to gain insights relying on quantitative techniques to result in better decisions and actions. Employing imagination in their work leads to creativity and can parlay into vision, and vision is a mark of a good leader.

In my mind, the job of the executive leader is to answer the question, “Where do we want to go?” After that question is answered, managers and analysts can answer the follow-up question, “How are we going to get there?” In order to answer this question, analytics are applied with the various enterprise and corporate performance management methods that I regularly write about. EPM/CPM methods include strategy maps, scorecards, customer profitability analysis, risk management, and driver-based rolling financial forecasts and plans. Collectively, they assure that the executive team’s strategy can be fully executed.

In Dunn’s studies he observed that other perceived characteristics of a good leader are over-rated. These include ambition, team spirit, collegiality, integrity, courage, tenacity, discipline and confidence. They are nice-to-haves but pale compared to technical competency, critical thinking and communications skills.

Be analytical and you can be a leader.


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