July 25, 2014

You are at the mercy of your analysts (and you don’t even know it)

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Analysis by 0HerMajesty0 on deviantart.com

I have a question for all those in leadership positions, who spend some amount of time on a weekly, monthly, quarterly or annual basis reviewing reports and presentations to get a handle on their business.  My question is this – For all the data you review – how was it put together?

I am of the opinion that the vast, overwhelming majority of those who review charts and graphs have no idea how the data was collected, downloaded, analyzed and ultimately converted into a presentation.  How much fudging, adjusting, hide this, don’t show that – goes on?

Here’s a fundamental truth: If you do not know how the number was constructed, you do not understand the number.

Anyone who has worked for any amount of time doing staff-level analytic work invariably knows that, when reports are presented, people will glance over the numbers looking for anomalies but never bother to understand the computation leading to what is in that report.  Any attempt to explain the methodology results in blank stares, glassy eyes and, in many cases, utter disdain for wasting time explaining the math.

Unfortunately, what matters more than the number is the methodology.  Information can be excluded and massaged.  It can be changed to put a positive spin on the situation.  As such, acting on information you don’t fully understand can lead to a disaster.

You can’t just focus on the “results” – meaning the data that you are presented in some pre-formatted set of documents.  Focus, instead, on the process that gets the results, the planning that creates the process, the knowledge and experience that develop the plan, the personalities that shape the knowledge and experience…..this is where the foundation for the performance you hope to see begins anyway.   The complex interplay of personalities is what drives team and group performance.  If you have the wrong mix, or a homgenous no-mix-at-all situation, then you’re clearly never going to get to a sustainable good result.

Instead, what you will get is a hodge-podge of suboptimal processes and broken business operations.  You’ll never know it, however, because the way the data surrounding those deficiencies is presented will be mashed into presentable form by an army of analysts, and that process will result in truly useful information being obscured, eliminated and misinterpreted.

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