To get the most out of big data, IT leaders need to mentor analytics teams on how to formulate "crunchy" questions, which are key to obtaining strategically and operationally meaningful answers.
During a recent visit with John Lucker, Principal and Global Advanced Analytics and Modeling Leader at Deloitte, we talked about the difficulties organizations encounter when it comes to obtaining breakthrough big data analytics that can transform strategy as well as assist operations.
Lucker describes these breakthrough analytics as "crunchy" questions because, "They are capable of forming the connective tissue between tactical and senior [strategic] level objectives in an organization."
What's an example of a crunchy question?
Instead of asking her team about current market demographics and sales results over the past six months, the Chief Marketing Officer asks instead, "Who are our next 1,000 customers going to be, where are they going to come from, and how and why are you going to win them?"
"This question addresses not only what brings customers to your company but also what makes them leave," said Lucker. "Asking a question like this is a lot more than simply doing a q&a....To begin to answer a question like this, you have to understand the company's product strategy, the various segments of customers that are served, what drives people to buy the products, what it is that 'closes' the sales deals with people, and also the various signals along the way that people leave. An analysis of all of this ultimately leads you to what you think you can do to elicit the kinds of behavior that you want."
Companies can spend years getting to the bottom of questions like these because of the complexity, but they also spend years answering lesser "non-crunchy" questions about historical customer and product performance that reports on what was done but that offers no insight into future strategy.
"In general, I get the sense that most CXOs do not feel that they have a good handle on how to get the most out of their big data analytics," said Lucker. "They say that they do analytics, but it's hard for them to define exactly what value they are getting from it. Initially, when we visited companies, we thought that they would be strong in the area of business intelligence, but what we are finding is that most companies need help in making their data meaningful."
How do companies get to the crunchy questions?
CXOs can start asking their teams to formulate more strategically-oriented and forward-thinking questions, but many team members require training and reorientation before this can happen, because it is the historical and operationally-oriented questions they have been taught and trained to answer. Consequently, the CXO must develop and mentor these teams first so they know what is expected in a crunchy question or a crunchy answer.
Lucker recommends that CXOs get the ball rolling by making sure that their analytics teams have a firm understanding of strategy — that is, what the company is trying to accomplish at the highest levels, and how this strategy plays out in operations.
Since corporate data stores and even new and incoming big data are unlikely to be aligned with this integration of strategy and operations, technology integration also must occur in order to bring together the various types of data that will be needed to ask crunchy questions.
None of this is likely to happen in reporting environments that have been entrenched in operations analysis for many years; this means that change management will be needed within the company as people are potentially repositioned in new roles. Orchestrating change management is anything but easy, because people have become comfortable with how they do work, and now they are being told that they must do it a new way.
A change transformation can be expedited if the CXO takes a leading role in assisting the team as it defines key performance indicators (KPIs) that questions and analytics should answer in order to be both strategically and operationally meaningful.
"This is an iterative process in which you will learn what works and what doesn't," acknowledged Lucker. But if organizations focus on the strategic value that they expect to get out of their analytics and, if CXOs lead the process, they will find that they can indeed ask the crunchy questions that get them the crunchy answers.