Meta Analysis

In the course of every day work, and everyday life, education pays back in ways other than cash. This is true for all sorts of learning, including reading, life experience, professional education and so on, but I’m talking about formal education for the moment.

One of the things that I have found most satisfying about a career in analytics is the opportunity to work with a diverse group of people, many of whom devote their lives to work that benefits all of us, worthwhile work that I might never be able to do myself. So many people invest a career in something others never think about. Indeed, the whole point is that others shouldn’t have to think about what they do. It’s a pleasure to meet these people, and to have something to offer to support their efforts.

At manufacturing plants galore, I’ve helped in the process of making better bottle caps, food wrap and beer, quieter medical diagnostic equipment, and more dependable electrical connectors. It pleases me to open a bottle and know I had a little hand in making sure it will open when I want it to open, and not when I don’t. It also pleases me to know that I have helped surgeons understand factors that may help people avoid amputation, and have greater likelihood of good surgical outcomes. When I see a client opening a new store in my community, it’s nice to know that my guidance for the store’s market research program helped make that possible. I owe all these experiences to formal education.

For every story we hear about a guy (it’s always a man, have you noticed?) who dropped out of school and made a fortune in business, there are 10,000 more guys and gals who dropped out and didn’t make a fortune, don’t have careers that make them proud, aren’t getting by very well, let alone contributing to society as much as they might prefer.

My college education has bought me more than a salary and more than opportunity. It actually does what it is supposed to do – provide me with broad knowledge which helps me to be effective in the workplace, active in my community and adaptable in a changing world. It disappoints me to see educated people downplay the value of education, minimize it to no more than a salary, or suggest narrowing education to purely vocational scope. If your education has meant more than a paycheck to you, speak up about it, speak loud, and don’t let the BS artists drown your voice.

While in London recently, I attended some of the Big Data Week events. One big draw was a Community Meetup featuring a panel of Big Data celebs. One question that came up: “How important is business knowledge?” To make a long story short, the panel did not band together and rush to the defense of business knowledge. There’s the difference between the philosophy of data mining, which was created to empower the business person, and the emerging culture of data science.

As nearly as I can recall her words, bit.ly’s Hilary Mason said that smart people could solve any problem. She did use the words “smart people,” and that was a real thorn in my side. Hilary is a force in the analytics community and she is much to be admired, yet my experience leaves me at odds with her on this one. It’s not that I doubt that people can adapt to new business situations or unfamiliar issues. On that point, I’m a believer. But it shouldn’t be done in a vacuum.

What’s wrong with letting an analyst dive into a problem without business knowledge? For one thing, it’s inefficient. The patterns that the analyst finds may not be meaningful – like predicting an event based on factors that only happen afterward. Or making assumptions that aren’t reasonable for the situation. And then, there is reinventing the wheel. Just recently I heard about a fabulous new analytic technology, complete with a group of fans, and I was dying to see it in action. After a huge buildup, I finally got to see the stuff in action, and my heart fell. It was nearly identical to something I worked with in the nineties that was a big flop with clients. The developers clearly hadn’t researched the history of their market.

It’s not realistic to expect that every project must be tackled by an analyst who is an expert in the business behind it. Maybe that wouldn’t even be desirable. But if the analyst doesn’t know the business, then working closely with someone who does is a must.

A prospective client came to me, very unhappy. A large investment in software had failed to enable the company to obtain the information they really wanted. They gave me a list of a dozen or so metrics, and told me that if I could prove my product could produce those numbers, they would buy.

The request was reasonable. The metrics were straightforward, not particularly hard to calculate. They were conversion rates – how many first time customers return for a second purchase, how many return a third time, and so on. Frankly, the product they already had was adequate to do the job. The problem was more a training failure than a software failure.

But there was another, more important, thing missing. The metrics were interesting, but not actionable. The customer was requesting a report, and I was in the predictive analytics business. I could and would provide the report, but I knew that I could do better for them. Doing better for the client called for introducing the concept of predictive analytics and showing proof that it could be done with the data available. And this time, the client’s staff would have to be properly trained.

The client didn’t seem to be doing a very good job of getting the basic information that was supposed to be included in their loyalty program registration. Wondering if it mattered, I took the data they had, and tested a simple model to see if the registration data was predictive of spending. It was, and the connection was dramatic – this was the proof I would need to make my case. The registration data would tell a lot about future spending – so it could be used to identify likely big spenders and use that information for marketing. Knowing that the information was valuable, the client also learned that it was worthwhile to make an effort to get that data consistently. And the model identified key factors associated with spending – factors that could be used for customer acquisition planning to increase profitability.

The customer liked what they saw. They got training and took it seriously. And now, even while times are tough and other retailers are contracting, that client is growing.

Do you have stories of doing right by a client by doing more than they asked for? Please share.

Have you taken an introductory course in statistics? If not, you should. If so, you should review.

Although I have spent a couple of decades as an analyst and had a lot of formal and informal training, I still feel that there is no more valuable training than knowing the material covered in Statistics 101. Not merely in passing the class, but in reviewing until you know the material cold and have great fluency in using and explaining it.

I’ve confronted many clients fixated on some shred of information, recalled from a class taken long ago, or picked up from a colleague somewhere along the line. One kept repeating the words, “Central Limit Theorem,” as if it was a powerful incantation. Another was convinced that a sample size of 300 was the answer to life, the universe and everything. Many became attached to particular analysis methods as a child is attached to a security blanket. Fancy talk does not help these people to move past their fixations.

What helps is a calm review. When the man obsessed with the Central Limit Theorem heard me calmly explain what the theorem said, he quickly realized that it didn’t say anything that was going to solve his problem. He trusted me, because I had shown respect by listening and addressing his concern. And he had confidence in my expertise, because I knew what the Central Limit Theorem was, and knew it very well. With that, we could move forward to address his business needs.

That little bit of information isn’t anything exotic or very complex. Nor is it secret; you can find it in every introductory book on statistics. But it’s the kind of thing we gloss over, perhaps memorize for the test, and never revisit again.

I could tell hundreds of stories of occasions where knowing the basics cold enabled me to calm a frustrated client, close a deal, or save somebody’s neck. But what’s more important is that you can develop greater capabilities to do all those things simply by investing the time to return to the beginning and review. If you want to do better and more practical work in analytics, plain or fancy, review the building blocks and rebuild your foundation.

Way back when, I worked with two very competitive managers. One was my boss at the time; the other ran a group worked closely with ours. The two men were about the same age, they had similar education and experience. They even had the same first name! [Let’s leave the real name out of it, but for this post, we’ll call them Bob1 and Bob2.] These were company men, both planning to spend a lifetime at one company, and both eying the same rungs on the career ladder. Every encounter between the two Bobs was a competition.

One day my boss, Bob1, came to me. He had just returned from a meeting with Bob2 and upper management. Bob2 had made some bold, confident statements about the effect of pricing on purchasing behavior. Upper management was very impressed, and they were running with it. Bob2 was a star! Bob1 was not happy, not happy at all.

Bob2’s remarks were rather remarkable. For one thing, his group didn’t do the type of research that would be needed to back up his claims. That was Bob1’s arena. On top of that, the stuff Bob2 had said sounded flat out wrong to Bob1. So he came to me. Bob1 repeated what Bob2 said. It sounded wrong to me, too, very wrong.

It appeared Bob2’s statements had come straight from his own misinformed imagination, but the C-level guys loved it, and they were going to run with it. Bob1 was fuming. This was war.

We had research, the best research available on the particular issue at hand. We had statistical analyses based on historical data. We had a good business understanding of the customers in question and the factors driving product demand. To top it off, I interviewed a big batch of our people in the field to see whether any of them had encountered the behavior patterns that Bob2 had described. Every single one of them laughed in my face; several actually chortled.

So, the story should end with happy ending for Bob1. He presents his case, backs it up with summaries of qualitative and quantitative research, and becomes a star in the eyes of upper management. The next promotion goes to Bob1. Bob2 slinks away in disgrace. But that’s not what happened, and often it is not. The big guys liked the first story, and they were sticking with it. It’s much easier to sell claims that people like.

I’ve written a lot about how to communicate about analytics, how to make a case, how to get and hold attention. But we all need to understand that even great research and great communication don’t always get us what we want. Still, it’s worth sticking with the program. Today, I did a little research. Bob1, it turns out, is still with the same company, and in a pretty influential role. Bob2? Couldn’t find him. Maybe the execs got the message, after all.

Long, long ago, in a land far, far away, there were frogs. Lots and lotsa frogs. Oh, the frogs were really beautiful princesses and handsome princes, but you’d never know it. They never got around to any kissing! Why not? They must have lacked passion.

Read more about the frogs, passion and analytics in “Analytics: What’s Passion Got to Do with It?”, my new post on Smart Data Collective.

Yesterday, a colleague asked me to explain why an analytics company that offers a very simple service sold to a larger company for a high price. He wondered why the simple service was so valuable.

It was valuable because it was simple! The actual analysis isn’t unique or even particularly special. But it is easy to use, and easy to buy, and many people will gladly pay for that. As analysts, we must constantly remind ourselves that the rest of the world has other things to think about. It’s up to us to speak their language, fit into their processes, and not the other way around.

Christian Arno’s Secrets to Social Media Success in Foreign Languages on Social Media Today explains some basics for global social media planning. One topic that it does not address – how will you evaluate your work?

No matter the language, if you’re going to invest in marketing of any type, you should have measurable goals and a plan to evaluate your results. This is often neglected, and so a lot of marketing resources are wasted. Much of the planning and analytics is the same no matter the language, but there are special issues when multiple languages and culture are involved.

Consider questions like these:

Do your goals need to vary for individual languages or countries?

Is text analysis for content and or sentiment useful to you? What process will make this possible for the languages you require?

What will it take to help a manager in your country able to develop a marketing plan appropriate for another, and evaluate the results?

If you’re an analyst, an IT pro, a software developer, or any other staff-level professional, there are probably some decisions you don’t have the power to make, but that you sure would like to influence. One of the most important elements for technical people to understand about influencing decision makers is that you must be prepared to deal with questions. That means understanding the kinds of questions likely to be asked, and being prepared to give good answers. Morgan Hunter just posted a good piece on questions and the business case on her Lotus MBA blog. This is written with IT in mind, yet it’s good reading for anyone interested in building more persuasive business cases.

If you are in Chicago and blog for professional reasons, check out the Chicago Blogs Meetup group.

It’s small group, very nice people with a lot of knowledge to share. And where else would I have met Chicago’s premier country music blogger?

The organizer is a WordPress expert. Want to learn? He offers classes!