You may read the title of this post and get excited because you think you’re about to read a post about how to have an edge on your competition with data analytics. This is partially true, but actually this post isn’t about data analytics, it’s about YOU and YOUR LEADERSHIP!
It’s no secret data analytics has become an essential business tool. However, this isn’t exactly a beast you can just let free and expect to get exactly what you need out of it. Is it possible that business leaders and managers are relying on data analytics too much for their company? Here are a few things a manager must understand if they want to properly “hone the craft” of data analytics.
Start with the problem
Don’t just collect data to say you collected data and then try to make something out of it. Data analytics isn’t something that should be separate from your business that helps your business, but rather something that is integrated into your business to help your business.
In a way, collecting data analytics is almost like conducting a scientific experiment. Like all scientific experiments you start with a problem or a question. What’s the point in conducting research if you don’t even know what you’re trying to gain an understanding on? Same goes with data analytics. As a manager you must know and understand what questions need to be answer in your business and then use data analytics within the core of your business to answer those questions. Don’t just run data expecting breakthrough results, run data with strategic purpose for your company.
Data analytics isn’t always gospel. Just because your staring at data doesn’t mean that it represents truth about what was experimented. Many times there are confounding variables present simply because of the comparison aspect in an experiment.
For example: you are a clothing store owner and you send out an ad including a coupon on winter coats. Only a handful of people end up seeing this ad, but your sales on winter coats goes up for the month. You assume, hey my ad worked, but what data analytics isn’t able to represent is the temperatures in your city were far below average for the month so people were in need of winter coats regardless of the advertisement you made. Therefore analytics failed because it was unable to ask the fundamental question “what is the temperatures going to be like this month?”
Use leadership in your knowledge
Is data analytics the manager of your business or are you the manager of your business? Seems like a silly question to ask, but as cutting edge as data science may, seem there’s no one who knows your business better than you. It’s perfectly okay to generate data with analytics in mind, but don’t leave it at just that! It needs to be coupled with the knowledge of your business. With this combo, you as a manager will be able to account for strange results. Florian Zettelmeyer, a professor of marketing and faculty director of the program on data analytics at the Kellogg School recommends asking this question when receiving results: “Knowing what you know about your business, is there a plausible explanation for that result?”
Share what you know if you want to grow!
Change isn’t always easy, but sometimes is necessary. If you want your business to grow you must train up all departments of your business on data analytics. What kind of leader hoards their knowledge? A good business leader would understand sharing knowledge on the fundamentals of data analytics would help a business run better. This doesn’t only mean understanding that data analytics is out there, but rather coaching team members on how to utilize it and practices all the points mentioned in this post.
Yes, data analytics is an incredibly useful tool in the business world. However, it’s can essentially be useless if you as the business leader aren’t doing your part.