Data Can Guide Us

But We Have To Be Willing To Listen – And Take Action – To Benefit

Unless you’ve been living under a rock – and a pretty big one, at that – you’ve probably caught wind of the massive hype surrounding Big Data these days. Suddenly, the answers to all that ails us seem deceptively close, provided we can aggregate enough data (size DOES matter when it comes to data, it seems) and computing power, similar to Deep Thought, the fictional supercomputer made famous in the Douglas Adams novel The Hitchhiker’s Guide to the Galaxy.

And, as with hype cycles before, business and the investor community are clamoring to make massive investments in anything related to Big Data.

Data and analytics practitioners have long understood the value of data-driven insights. Regardless if marketing and advertising (which happens to be my field of focus), supply chain planning, demand forecasting, credit decisioning, insurance underwriting, fraud detection and prevention, or countless other areas, the collection and analysis of large pools of data have been the key to success for years.

So Why Don’t We Leverage Data More?

There are many day-to-day, more mundane examples where statistical analysis can help identify anomalies or spot outright crime.

A Little Child Shall Lead Them

An example where survey data would have helped.

One good example, from right where I happen to live, is the 2009 Atlanta Publics Schools cheating scandal. For readers unfamiliar, here’s a quick overview: in 2008 an investigative reporter from the Atlanta Journal Constitution noticed that some schools, primarily those within the Atlanta Public Schools system, had made rather impressive improvements in their standardized test performance. Upon closer analysis these gains were found to be not only impressive, but also statistically improbable. And, indeed, further analysis revealed the one of the largest cheating scandals in the history of the United States, with 178 educators from 44 schools suspected of altering tests.

But it took nearly three years for anyone to take note.

So why is quantitative analysis not applied regularly to more areas? At a minimum, it would seem that areas like government contracting, Medicare/Medicaid disbursements, or controlled prescription drugs would seem to be prime candidates for statistical analysis to identify fraud, waste, and abuse. These transactions are conducted electronically and controlled or regulated by the government, making the data easily accessible.

And, as it turns out, all of these areas appear rife with fraud and other abuses, costing the taxpayer as much as $300 billion annually. Moreover, once the data available is analyzed – even at just a very high level – outliers that warrant further review are easy to spot:

While these data points alone may not prove malfeasance, they clearly call for further analysis. One would think that, in these times of fiscal belt-tightening and austerity, citizens and lawmakers alike would demand they be investigated.

Unfortunately, one would be largely wrong.

So Why Don’t We Listen?

Why then, is the data ignored all too often, even in cases where it is readily available and speaks for itself, clearly warranting further investigation? There are several reasons for this, though none very good:

Conflicting Self-Interest

Humans are a predictable bunch and often prone to putting our own interests first. Contractors defrauding the government, pharmacists running pill mills, or doctors ripping off Medicare all share a common pursuit: money. There’s a reason it is said to be the root of all evil. Even the Atlanta schools cheating scandal, which jeopardized the educational success of thousands of children, ultimately came down to bonus payments for teachers and principals.

So, if doctors are willing to break their Hippocratic oath and educators will risk harm to the children in their care for monetary gain, who can we trust? Trust the data.

Willful Ignorance

When misdeeds come to light, the most common defense brought by those accused is that they simply didn’t know it was happening. When that fails, some may admit to having known but insist they were unaware of the damage caused. The leaders at Atlanta Public Schools actually suppressed a report – one they had commissioned and paid for themselves (via tax dollars, mind you) – because the report findings didn’t suit their needs.

AbuBakrQuote

This sort of selective hearing – or outright willful ignorance – is commonplace, but should never be an acceptable excuse.

Resistance to Change

It is said that the most dangerous – and expensive – phrase in business is “We’ve always done it this way”. People love stability. They hate – and will resist – change. Especially if it entails effort. And, if sticking to the familiar ways just so happens If it happens to also be personally lucrative – and provide job security and status – even better.

More money for less effort and risk is a powerful incentive.

Insight Without Action = Status Quo

So, while analyzing data and drawing conclusions is valuable, it is not by itself sufficient to bring about needed change. Ultimately, someone has to not only have the gumption to ask the right questions and the analytical skills to draw the right conclusion; they then also need the courage to speak up and call the emperor naked.

Management – and our society – should actively seek to create an environment where employees – or common citizens – feel empowered to express dissent and challenge widely held assumptions, without fear of retribution or backlash. But we should also insist on seeing the data to verify the claims made. And, once validated, we should act. Decisively, and with confidence.

Anything less is little more than a kabuki dance with data.

About Daniel Backhaus

Dan has close to 15 years of experience in the field of information technology, brand development, and interactive marketing, working with brands that include Bayer AG, BMW, Daimler-Benz, Deutsche Bank, H&R Block and Wachovia. His diverse background includes service in our nation’s military, and stints at Xerox, TSYS, several technology start-ups and leading interactive agencies in Europe and the United States. Originally from Germany, he has lived and worked in Germany, the Czech Republic, Greece and England before settling in Atlanta in 2005. A PMI-certified Project Management Professional and a Six Sigma greenbelt, his experience includes digital strategy, solution sales, new business development, enterprise systems implementation, project and program management, SEO/SEM and Web Analytics. Dan holds a BS in Business Management from Arizona State University and an MBA with concentration in international business from the European University in Montreux, Switzerland. The parent of three young children, Dan’s interest in environmental sustainability issues stems from concerns over their future well-being and his international background have given him an enlightened perspective on the challenges we face and the approaches other countries and societies have taken in addressing them. Dan blogs about technology, his love of writing, interactive marketing, brand development and strategy and whatever or whoever might have pissed him off the week before.
This entry was posted in Analytics, BI, Big Data, Business Analysis, Business Intelligence, Uncategorized, Web Analytics. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *