Sunday, November 22, 2009

Of Airplanes and Office Floors: Why BI is a Means to an End

There continues to be a great deal of discussion surrounding BI technology – which tools are better – the merits of search, predictive analytics, advanced visualization, etc. However, I think many have lost sight of why we use BI tools and technologies. They are not the end but the means to developing deeper insight and understanding.

Additionally, the analysis of data, however valuable, serves as a “rear-view mirror”. It tells us what has happened and is limited in its ability to predict the future. I am reminded of the book, The Black Swan by Nassim Nicholas Taleb. In it he talks about the “highly improbable” - the unpredictability of improbable events - and how historical data simply cannot help us fully anticipate them.

In my first book, The Performance Management Revolution, I used an aviation analogy to describe BI and EPM. I talked about all of the instrumentation that pilots use to measure a flight’s progress. However, with all of the great instrumentation at the disposal of pilots, it’s always a good idea to occasionally look at the window. And, even when flying in the clouds and in IFR (instrument flying rules) conditions, the point of the instrumentation and associated flight planning is to get you to where you once again have visual references in order to land.

BI is no different. We ought to use BI to learn as much as we can, and develop models and assumptions about the real world. However, we should not consider that the end. It is merely a beginning – a means to expand our discovery – a foundation for learning and the development of even greater perspective. Like the aviation analogy, our analysis of data provides the instrumentation to find needed “land” references, and a context for further exploration, learning and a more complete understanding.

By way of example, when I was researching my new book, Profiles in Performance: Business Intelligence Journeys and the Roadmap for Change, I spent a significant amount of time on the phone, with case study candidates, trying to assess whether they’d be worthy subjects for the book. However, even with all of this pre-work, once I arrived onsite and began to develop relationships and interview people face-to-face, it became clear that things “on the ground” were different than my assumptions. Had I relied solely on data collection (surveys) and telephone interviews, I believe my perspective and that of the book would have been much less well informed – rendering the book far less useful.

So, how much do we really know? How good is our perspective? To help answer this, let me share a couple of stories from my own experience:

A CEO at a company that I once worked for used to regale everyone with the same tired old story of a customer CEO that explained how valuable we were to his organization. In truth, our CEO didn’t spend enough time with customers. And when he did, he avoided asking difficult questions and shunned criticism. And, although he wanted to be perceived as customer-oriented, he relied on “experience” and “gut instinct” to run the company. Hence, he used this recurring customer anecdote because he simply didn’t have any others. He was sorely lacking in real perspective.

In stark contrast, many years ago, at another company, I recall meeting with a long-time customer that recounted the early days when our founders (whom I held in high regard) used to sleep on his office floor during the round-the-clock development of their software solution. At the time I was embarrassed for them. How could this customer demean my leadership with such a story? But, in retrospect, I now realize that, as a result, they had an intimate working knowledge of their customer’s business and were able to develop a great solution. I now view this as quite an accomplishment, and the key to their success back then.

Sadly, most organizations will find that they have more in common with the first story than the second.

So, BI is valuable – but as a starting point, not as an end in itself. Use it to develop a model and document your assumptions. But then go and test that model in the real world – prove or disprove your assumptions. Through that process you’ll develop real and defensible perspective.

Finally, instrumentation (BI) is great, but it’s critical to take a look out the “window” for those important “land references”. And, once you're "on the ground" – in order to get real perspective - you might want to consider sleeping on your customer’s floor.

As always, I would love to hear your comments - and your own stories!