Thomas Davenport, co-author of Competing on Analytics, has published yet another great Harvard Business Review article, Keep Up with Your Quants.
For leaders who are driving their organizations toward data-driven decision making, Davenport recommends they need to be more involved with the analytical process. Defining the technical analysts within the organization as “quants”, he says, “Companies need general managers who can partner effectively with “quants” to ensure that their work yields better strategic and tactical decisions.”
Credit union leaders should start seeing themselves as “consumers of analytics”. Quants produce the hard information you can combine with your intuition to support effective decision making. What quants often lack is the business experience and acumen to deliver the right information. As a smart consumer, you need to guide your analytics team through a process that results in the information that accurately targets the problems you are trying to solve.
Davenport proposes five steps to sharpening your skills as an analytics consumer.
Learn about analytical tools and techniques
Knowing something about the analytical toolbox is crucial for the non-quant manager. Becoming a quant yourself is not the goal. Rather, understanding what can be done and how it looks when it is done well will help a manager get the best out of the analytics team.
Get in tune with the quants
Building a strong, trusting communication link with your analysts is important. Quants often become order takers who know little about the underlying business problem to be solved. Credit union managers should take time to educate analysts about the background of the business issues. This can stimulate the team to find innovative ways to use data and analytical tools to produce superior results.
Begin with the end in mind
A common mistake managers make in using analytics to solve problems is failing to plan the final step in the process. That final step is planning the communication of the results. Asking a basic question like “who is the audience” will shape the direction of the analysis.
Don’t wait for the results from the black box
It’s tempting for managers to communicate their requirements and send the quants off to do their magic. The results of this process have a high potential to be off-target. Managers should leverage their refreshed knowledge of analytics tools and good communication connection with the quants to ask questions along the way. While it is important to avoid “back seat driving”, challenging the team to keep the analysis focused on the business problem is beneficial.
Inquiry not advocacy
Analytics consumers need to teach the organization the value of evolving an objective analytics process. This means avoiding the trap of finding data to support pre-conceived ideas. Rather, a mature data-driven organization is not afraid to present information that challenges the status quo. Doing so can spur innovation that leads to improved performance and competitive advantage.