10 Must-Read Articles from HBR (2010/2/5)

Davenport, Thomas H 200

Title: COMPETING ON ANALYTICS
tdavenport@babson.edu 6
Harvard Business Review; Jan2006, Vol. 84 Issue 1, p98-107

Abstract
From Abstract
More than killer app (technology), Industrial Strength Analytics across a wide variety of
B activities
E Statistical analysis and quantitative activity at the enterprise (not departmental) level.
F
O
R KeyWord
E Decision making, quantitative analysis, technology attitude, innovation adaptation,
competitive advantage , Analytics Competitor
Interesting Point
Statistics? Oh, boring!
Important Concept from my view or author’s
companywide respect for measuring, testing, and evaluating
those numbers told me exactly what I needed to know
A
Analytics-minded leaders, When to run with the numbers and When to run with their guts
F I got an idea!
T
E Business leader should be ambidextrous with help of entrepreneurial impulse and evidence.
R Etc.
President's Distinguished Professor of Information Technology and Management, Babson College, Babson Park, Massachusetts
Director of research, Babson Executive Education / Fellow, Accenture

End of page

Pag
e Note
99- Case) Amazon, Harrah’s, Capital One, Boston Red Sox, New England Patriots, Oakland A
10 Top managers had announced that analytics was key to their strategies.
0
10 Analytical activity at the enterprise (not departmental) level.
0
10 Executives’ commitment and willingness to change the way employee think, work, and are
0
treated.
“Do we think this is true?” or “Do we know?”
10 Ex) Marriott International: over 20yrs, / Total Hotel Optimization Program / quantitative
0
expertise /
/also empowerment to override the system’s recommendations in case of unpredicted local
factor
10 3 key attributes among analytics competitors
1-
10 1. (method by) widespread use of modeling and optimization (30,000 experiments a year of
3 Capital One)
2. (applied to)an enterprise approach(UPS Customer Intelligence Group, detection-sales person
contact-resolving)
3. (ownership by)senior executive advocates
(Loveman of Harrah’s, Jeff Bezos of Amazon, and Rich Fairbank of Capital One),
10 Information-based customer management, information-based customer management of
2
Barclays Bank
10 Business intelligence, IT department => still chaos due to focus on simple function
2
10 “In God we trust. All others bring data.” – Barry Beracha, former CEO of Sara Lee Bakery
3
Group
10 Analytics-minded leaders, When to run with the numbers and When to run with their guts.
3
10 Source of organizational strength : Right Focus/ Right Culture / Right People/ Right
3
Technology
10 The right focus:
3-
10 customer loyalty/service, pricing and promotion(Harrah’s), logistics (UPS), data-mining with
4 suppliers (Wal-Mart, E.&J. Gallo, Procter & Gamble(Joint Value Creation), Owens & Minor)
10 The right culture:
4
companywide respect for measuring, testing, and evaluating
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 Barry Beracha, “data dog”
Still tension btwn entrepreneurial impulse and evidence in analytics culture
Even Amazon’s Jeff Bezos trusted his instincts due to need for fast decision and untestables
‘Search-Inside-the-Book Offering project’ without test of critical mass (120,000 books)
10 Yahoo Progressive and Capital One: product change > small scale test > validation >
4
implementation
10 The right people
5-
10 @Job description ( of Capital One analyst)
6 “High conceptual problem-solving and quantitative analytical aptitudes… Engineering, financing, consulting, and/or other
analytical quantitative educational/work background. Ability to quickly learn how to use software applications. Experience with
Excel models. Some graduate work preferred but not required (e.g., MBA). Some experience with project management
methodology, process improvement tools (Lean, Six Sigma), or statistics preferred.”
@ ability to express complex ideas in simple terms
@ relationship skills to interact well with decision makers
@“PhD’ with personality”
@ SAS, average 18 months to recruit
@ analytical talent(early 2000s)≠programming talent(late 1990s)
10 The right technology
6
Data strategy / Business intelligence software / Computing hardware
10 The Long Road Ahead
7
It takes several years to come to fruition after launching.
‘Collecting data for six or seven years, being usable in the last two or three’ – analytics at
UPS
‘Firms should keep managers in their jobs for longer periods because of the time required to
master quantitative approaches to their business’ – analytics-minded executive at P&G
(p102) Going to Bat for Stats (analysis-versus-instinct debate)
Moneyball, by Michael Lewis, Nights in August, by Buzz Bissinger
Oakland A’s, New England Patriots, Boston Red Sox (‘sabermetrics’), A.C. Milan(‘Milan Lab
research center’ from the view of Analytic HR strategies), Bolton Wanderers,
Bill James, the famous baseball statistician
St. Louis Cardinals manager Tony La Russa
“I appreciated the information generated by computers. I studied the rows and the columns. But I
also knew they could take you only so far in baseball, maybe even confuse you with a fog of
overanalysis. As far as I knew, there was no way to quantify desire. And those numbers told me
exactly what I needed to know when added to twenty-four years of managing
experience.”
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www.twitter.com/lovelyhaley03, www.facebook.com/chang21c Hope you see you again^_6