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Informed Sceptics: how to use rich data effectively

Date: 07 Sep 2011

Citywealth

Despite putting considerable financial and human resources against intelligence tools designed to harness the power of big data, most companies are not equipped to use data assets to create competitive advantage or drive corporate performance. This is because more than 60 percent of employees lack the skills required to make good business decisions. According to the Corporate Executive Board (CEB) (NYSE: EXBD), an insight deficit is emerging because these employees fail to complement data with the necessary judgment to arrive at optimal conclusions. In many cases, this lack of judgment has led to widespread corporate crises negatively impacting everyone from the CEO to the average consumer.

CEB surveyed approximately 5,000 workers at global companies and found the insight deficit to be pervasive not only among the general employee population, but also among management, with more than 50 percent of senior managers lacking in analytical skills and processes. Research revealed that a typical employee either relies on data too much or too little. Forty-three percent of employees trust data without questioning the results and almost 20 percent dismiss data-driven insights in favour of a “gut” assessment. The employees who are best equipped to make good business decisions – those who effectively balance judgement and data‚Äîpossess strong analytical skills and take into account the opinions of others. This group, which CEB calls ‘Informed Sceptics,’ represents only 38 percent of the average workforce today.

Fortunately, many of the qualities that make Informed Sceptics an asset can be cultivated to enhance corporate performance. In fact, companies that equip employees to overcome the insight deficit can achieve a boost of as much as 24 percent across a wide variety of metrics, including effectiveness, productivity, employee engagement, and market share.

To maximise existing investments and capitalise more fully on the promise of big data, companies must develop and refine employee skill sets. CEB recommends that executives begin by cultivating Informed Sceptics across the organisation by:

– Broaden the base of employees with analytic skills

Exploiting data will require broadening and deepening analytic capabilities across the enterprise. Ensure these skills are not limited to a small number of analytic experts.

– Educate employees on the limitations of data

To apply judgment successfully, employees need to understand the ‘narrative behind the numbers’. Understanding the origin of the data will allow employees to ask the critical questions to gain deeper insights and question faulty logic.

– Develop an analytical training curriculum

Two-thirds of employees have access to information and analytics training, but only 25 percent find it effective. Adopt a multi-pronged approach to design training that supports employees across the information life cycle and focuses on conducting analysis.

– Build a team of ‘quant’ coaches

Coaching skills are what make analysts most effective in reducing the insight deficit across an enterprise. Change your recruiting approaches to test for these skills when hiring analysts.

– Formalise decision processes

Insight-driven cultures are best realised when business and decision-making processes are formalised. Make performance metrics transparent, embed them in performance objectives, and use them regularly.

www.insightdeficit.com.

www.executiveboard.com.

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