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.
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.
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:
- A single Florida ophthalmologist billed Medicare $21 million in 2012
- A physical therapist in Brooklyn billed Medicare $4.1 million in 2012, supposedly delivering over 183,000 treatments, about 500 per day. Every day.
- Southerners apparently suffer from acute pain requiring prescription opiates at three times the level of Hawaiians
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:
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.
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.
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.