We’re getting exceptionally good at grabbing metrics from anywhere, and in real time, too. Business intelligence tools have evolved into visualization apps and as a result, colors, shapes and lines tell us whether we should be happy or unhappy about data. We are awash in ‘cues’ from inside and outside our enterprise. But by itself, more data and better visualization aren’t the answers to better business outcomes; they are just free-floating data.
Getting to the reward
Cues are only as good as the behaviors they stimulate in response. Without paying close attention to the behaviors, which we call business processes, we end up with a ‘fog’ of activity that isn’t repeatable, isn’t accountable and is unlikely to gain the reward (which can be avoiding a disaster or increasing revenue) that the cue signaled. Worse, we can’t be sure activities that should cross functional boundaries are doing just that. This is the tragedy that befalls most organizations.
Beyond a response, processes form the context for metrics. Organizations that haven’t modeled their enterprise may have the greatest dashboards but lack an ability to know how and where to make change when data shows a problem or offers an opportunity. Cues are wasted when they aren’t understood or framed properly. “That’s the way its always been done around here” is a great answer when there’s no better explanation for why and when we respond to a cue.
Best-selling author Charles Duhigg talks about the management of responses to cues in his bestseller, The Power of Habit. The cookie story is a great analogy for not understanding the context of a metric, poor organizational response and an undesired business outcome. His message is simple but powerful: Understand the cue, be deliberate in response, and gain the most favorable outcome.
Once we’ve figured out when and why we measure, we need to understand what to do when data tells us to act. We need to be constantly looking for better ways to respond and make the reward more consistent and larger. We need ways to know that each member of the organization is aligned with what cues mean, what activities cues prompt, and what outcome we’re expecting. That requires either an enormous amount of labor or automation tools that can make the effort manageable.
Going beyond data
At some point, enough cues have been analyzed, put in proper context in a business model and outcomes sufficiently optimized that the organization reaches a higher level of sophistication. Better and more meaningful cues are developed, targeting more specific opportunities, resulting in an ability to manage complex events with complex responses. The most sophisticated organizations have created a platform for a cycle of analysis, correction and organizational change. It is a virtuous cycle that only starts with data but ends with predictable reward.
What are your thoughts on the tragedy of free-floating data?