I had a good chat today with Tom Davenport, the co-author (with Jeanne Harris) of Competing on Analytics, who's out with a new book. The follow-up, Analytics at Work (Harvard Business Press), adds researcher Robert Morison to the byline, and a more pragmatic approach to gaining analytic maturity.
I first met and interviewed Tom more than four years ago, and we actually scooped HBR with a column that previewed his seminal byline on competing with analytics. That article was a stake in the ground to say that analytics would be the new competitive edge for successful businesses.
When we initially spoke, Tom's book was only a thought, but it went on to resound strongly and for a long time as validation for both consumer and vendor advocates of analytic technology and proficiency. What I respect about Tom's work is that it is mostly based on interviews with corporate executives on the demand side of analytics, and not just the usual ivory tower preaching. On balance, Davenport also enlists tech providers as confidants; Jim Goodnight of SAS is among vendors credited with providing insight to the authors of the new book and has a prominent endorsement on the jacket.
But about that first book, how did it hold up over time? Many speaking engagements later, Davenport sounded just a bit deflated at the overall progress, but not very much surprised.
"I'm not sure what fraction of organizations were ever really that interested in competing on their analytic capabilities," he told me. "Most senior management teams just aren't comfortable enough with that as a strategic objective."
That said, most organizations are also striving to get better at analytics. In a newer study, Davenport asked 57 companies whether analytics had been used to improve a decision, and 85 percent answered positively.
That's reflected in the new book, which is less of a call to action and more of a "how-to" guide for progress. It includes a useful mnemonic framework for analytic proficiency called DELTA (standing for Data, Enterprise, Leadership, Targets and Analysis) and a five-level maturity model. It's constructive, Davenport found, to understand that not all organizations aspire to compete primarily on analytics, that some are daunted by it, but most all would like to be better at it.
"We were just reviewed in the Financial Times, and the reporter said something to the effect of, 'this is kind of challenging, don't try this at home.' So I think the average organization still has a lot of issues related to analytics. Maybe recessions make people more cautious to adopt new things too. I don't know. But you'd think we'd be further down the road than we are."
A likely finding that's part of the new book is that analytic proficiency is arriving in equal parts along with cultural change and change management. "Leadership roles and front line strategy is changing, partly because companies have better data," said Davenport. "So technology and a lot of behavioral things are how people are creating interventions to make better decisions."
That made it especially interesting that the last chapter of the book listened back to 10 years ago when decision support was more closely tied between information, analysis and the decision being made than it is today. "In a lot of cases we've gotten away from that today and it's to our detriment," says Davenport. "I talk to a number of organizations that say, 'we do great analytical work, we have great data, but we still make lousy decisions.'"
I figure that the newer emphasis on business rules combined with predictive analytics might bring us back to that kind of decision support, and Davenport said that's probably the most comparable frontier we have right now. "That's the best link we have for something that's embedded in an automated decision process. Even where other decisions necessarily involve a human in some capacity, the technology can make recommendations or produce a score."
My takeaway is that Analytics at Work is a helpful guidepost to taking analytics where you want to take it for your own particular organization. It draws heavily on the real world and understands the oppressive reality of non-technical opposition to change. It also reminded me of Kemal Cetin, a director at Coca-Cola Enterprises who is featured as one of 25 Top Information Managers I interviewed for the upcoming issue of Information Management. It was Kemal who best defined for me what he calls the impatience raised by "the tyranny of the urgent."
If either end of that is something you can relate to in your experience, sound off.