The Truth About Analytics as a Strategy

Big data and analytics continue to top the list of 2017 business buzzwords. Almost every department in every organization wants to reap the benefit promised when purchasing a new tool or investing in a new program.

In initial client meetings, I often hear the terms ‘analytics as a strategy’ to reap the rewards of the ‘low hanging fruit’ and ‘what tool will allow us to find opportunities’? Although I do have tools that I recommend based on client needs, I want to put an end to the discussion of ‘analytics as a strategy’ or the thought of the ‘silver bullet software’.

During the internet boom, when organizations began publishing their content on the world wide web, many thought that business would automatically grow due to ‘internet as a strategy’. Years later, these same organizations began to realize that launching a website would not guarantee automatic revenue growth. They soon realized that the web provided them with a better opportunity to reach larger audiences. However, if the organizational message was not clear or succinct, the large audience would simply ignore it.

Launching an elaborate website without explaining the value that the good or service gives the consumer would not achieve the organizational objective of raising revenue. I would argue that many parallels can be drawn between ‘internet as a strategy’ and ‘analytics as a strategy’.

For those strategy professionals reading this, you might agree with the following statement:

Strategy is free.

In other words, strategy is a plan not an action.

The strategy of an organization is usually composed of a vision and mission statement. For example, Disney’s vision statement is “to make people happy”. Seems simple. The analytics program should be focused on measuring the strategy. In other words, how do we measure happiness? It may seem vague, but each department will create their own definition of ‘making people happy’.

For example, human resources might view happiness as staff happiness or employee retention while operations might measure the patrons return visits to Disneyland. It is the job of the analytics program to help quantify what happiness is and measure the result of happiness. The analytics program will provide recommendations that would make the employees happier with an added benefit of making the customer happier!

In this example, analytics is not the strategy, it is a tool to give continuous feedback and help solidify the strategy into the everyday tasks and behavior. Analytics makes the strategic vision measurable; analytics isn’t the strategy.

In order for organizations to go beyond ‘gut feel’, analytics must be leveraged. Analytics takes companies from ‘I feel that our customer would like that’ to ‘74% of our customers are extremely satisfied’. Analytics can be used as a wedge to introduce change and accountability. In the above example, how can marketing increase the 74% to 78%? These questions introduce change management concepts into driving the strategic direction of the organization.

To accomplish these tasks, organizations often lead with the ‘silver bullet tool’. In my opinion, too much attention is given to a new shiny tool when the organization should be focused on driving strategy and results. Yes, I have my favorite tools that make the analytics process more efficient. However, the tools aren’t the strategy and will never will be. They should be treated as such.

Would you expect to completely change your golf game with a new set of clubs? There’s always hope that the new clubs may make a small difference, but they aren’t a game changer. Just as new software may improve some areas, it should be viewed as a tool to aid with the larger task at hand.

Achieving strategic initiatives has been and always will be difficult. Let’s face it, the vast majority of analytics projects fail. Just as I blame a bad golf shot on my golf club, I would argue that many organizations blame a failing analytics project on the tool. Most of the time, the tool isn’t the problem, it’s how you are using it.

Analytics will identify organizational opportunities and strategic areas of improvement, it is up to the organization to embrace the analytics and embed them into the strategic decision making. Before blaming the tool, objectively analyze the organizational strategy.

As with all things, there is no silver bullet and nothing comes easy. Embedding an analytical mindset into organizations is a journey without a defined endpoint. There will always be areas for improvement and new opportunities to strive towards.

Don’t let the hype, buzzwords and new software pull the wool over your eyes. When planned correctly, analytics is a challenging journey with huge potential. Failing to understand the shift in strategy and the magnitude of organizational change involved might, in the end, have you blaming the tool.