Data, Strategy, Leadership, and Innovation

Month: July 2016

3 Steps to take Data Analysis from “Well, That’s Interesting” to Revenue Impacting

Data is hot right now, and it seems everywhere in business these days there is another tool or framework on how to leverage data to drive a real difference in your business.

A good metaphor to understanding data effectively though, is training for an Olympic event (great timing for the metaphor, eh?). Most athletes train, not for the sake of training, but most likely because they want to stand on the podium with a medal as a statement to how good they are at the event. Anyone can train for the sake of training, but competing and winning is really the whole culmination of 4 years of tireless preparation and training.

The same is true for data visualization, in that the real goal should not be building dashboards and pretty charts, but pointing to the direct impact that data had on driving a top or bottom line impact on the company’s revenues. Yes, in larger companies it’s very hard to make a difference on the overall number, but every piece of data should tie to some positive contribution or else what is the point?

Yet, with so much data being made available, and so many people learning how to mine data for insights, there’s a lot of very pretty pictures out there which don’t move the needle at all. Yes, it’s great to hear about athlete’s and how they train, but the credibility isn’t there to the same degree as it is if they’e wearing an Olympic medal. If you’re a budding data analyst, or seasons chart builder, imagine if everything you built had a number next to it that said “this piece of data drove this quantifiable business impact”.

Though data visualization can serve qualitative benefits, such as monitoring a key business process or helping change a perspective on a topic, there should still be some way to tie even those things back to the difference it made (or could make) on the business.

Here’s three steps then, to help that mindset along

1. Understand the Reliability and Structure of the Data You’re Using 

All because you have data, and have access to data, doesn’t mean it’s useful or all that important. You having access to log files from a server, which spits out information on usage patterns of your e-commerce system throughout the day only matters if you’re able to impact that usage in some meaningful way, then tie it back to a positive revenue lift. More importantly though, you have to know the data is reliable and understand how to model it in a way that it produces accurate conclusions. Build some baseline metrics, and measure against numbers you know are correct before going into any complex modeling exercise. Once you put a chart in a slide, it’s out there. So make sure you’re starting from the right data set to begin with. 

2. Develop a Series of Hypothesis about Your Business

Once you know the data you’re working with, and have a good sense of how reliable it is, think about the business as it relates to parts you can actually control / influence. If you’re in advertising, don’t focus on product improvements. If you’re in product development, don’t worry about retention patterns on the website. Think about 3-5 gut instincts you have about how the business could operate differently, then use the data to test out those theories. Don’t simply mine the data, hoping the magical insights just pop out at you. Data, like a car, helps you get to where you’re going – it won’t take you there on it’s own. You need to at least have a rough idea of what you’re looking for, so you can build worthwhile visualization to help vet that hypothesis into an actual conclusion.

3. Focus on Low Hanging KPIs, then Expand from There 

It’s easy today, with technology making more data accessible with less effort, to try and go after ground breaking insights. However, you no doubt have areas of your business you can directly impact and know will make a sizable difference to the bottom line, that you need help in influencing. Start with thinking through 3-5 KPIs coming from your hypothesis that you can build from the data you’ve vetted, to influence key business people or back up your assertions with a new direction you’re moving your team in.

If you can measure it, you can prove it (as long as it’s reliable and true), but remember that it’s never a silver bullet or the whole story. Data can be powerful, but it can also lead people astray or get people focused on the wrong things. When done right though, using validated data tied to a hypothesis and measured in a way that drives a meaningful revenue outcome, it can make a big difference.

Share: Share on FacebookShare on Google+Email this to someoneTweet about this on TwitterShare on RedditShare on LinkedInPin on Pinterest

Why Tableau is Worth Billions: A Case Study on Becoming a Digital “Port City”

It’s appropriate that Tableau is located in Seattle, as they both became popular for similar reasons.

Seattle, started as a logging town shipping lumber down to San Francisco, then hit a big boom during the Klondike gold rush followed by a big shipping boom. It then moved into a big boom in aerospace followed by the growing influence of technology – starting with Microsoft. Access to resources, and a connector between multiple places. Seattle was big on logging, because there was an ocean that made it easier to transport lumber south, with the means to make it accessible and useful. Seattle was big during the Klondike gold rush, because you could take a ship from Seattle over to Alaska, and provided the resources and shipping to get there. Seattle was big into aerospace, because William Boeing got things kicked off here so there was the resources and buyers to set up a shop and build an aerospace business. Seattle then became big into technology, because Bill Gates changed the world with Microsoft Windows and people could come and leverage the resources that created.

Now lets look at Tableau – From wikipedia: “In 2003, Tableau was spun out of Stanford [9] with an eponymous software application. The product queries relational databases, cubes, cloud databases, and spreadsheets and then generates a number of graph types that can be combined into dashboards and shared over a computer network or the internet. The founders moved the company to Seattle, Washington in October, 2003, where it remains headquartered today” 

Tableau then, wasn’t famous because it invented data or created a better way to store data. Rather, the platform made that “digital lumber” we know as data more accessible. It became a way for an average user to reach out into the data space and extract useful information, which they can then use. In effect, Tableau is the digital “port” city for many business owners, that provides access to that raw material and the capability to make it useful.

Becoming a digital port city then, isn’t all about what the platform provides in and of itself but the material it helps you gather / process / leverage. Social media is billions of messages, but Adobe’s Marketing Cloud promises to make quantifiable sense of it all. Server log files are completely useless in and of themselves, but Splunk helps turn all that into a meaningful dashboard.

Lots of tools exist out there, promising to mine assets and turn them into something useful. But as data became a boom, and the trend grew, you could also see the rise of companies like Tableau growing along with that tide. If cities in the 1800’s decided to use clay instead of lumber, perhaps Seattle may never have taken off.

What’s important to note then, is that becoming a digital port city can produce a tremendous amount of value as long as the resource you’re accessing is growing in popularity. However, everything (even data) only stays a popular trend for so long. The hope is, then, that you’ve grown enough to sustain yourself until the next wave takes off and you can successfully adapt along with it. Tableau is in it’s first major boom cycle, as Seattle grew with lumber. As history has shown though, Seattle had many boom and bust cycles as time goes on. How many companies also rise and fall within a single hype cycle (ex: Detroit) ?

Becoming a digital “port city” and staying that way really comes down to 3 things

1. Don’t oversell the hype (to yourselves or your clients)

No matter how on fire your company might be today, every marketing pitch or slogan only has so much gas in the tank. Focusing on the broader industry issue (ex: revenue growth vs access to data) means you’ll continue to stay relevant long after the initial hype has passed. Take advantage of a trend’s popularity, but don’t so closely associate yourself to that one thing that you can’t exist without it – what if Kodak had focused on better living through chemistry vs film? As film declined, chemistry surely didn’t go out of style. And as it turned out, Kodak had some of the most talented chemists in the world working for them because film is a hard thing to make. What would have changed, if Kodak’s brand became focused around something that wouldn’t ever go out of style, vs a single product focus? 

2. You’ll have to think of the post-hype at some point 

Yes, it’s important to stay hyper-focused on your core competency and capability during a big sales cycle, but long term planning focusing on “what do we do when people don’t care about X trend any more” is important. Google will have to figure out ways to make money, after online advertising. Facebook may not be the hot social network 100 years from now it is today, and Microsoft is already starting to evolve in a world that cares less about personal computers. Tableau, too, has the talent and revenue to think about what’s next in the data space long after people stop caring about 2D data visualization in the form of accessible dashboards. Though we have examples, every company has to overcome it’s own culture and leadership challenges to continue to evolve and adapt. 

3. Build a foundation around the longer term trend, while capitalizing on the current hype 

Say you’re Boeing, and you’re contemplating life after airplanes, or perhaps investments that build a platform of services focused on a single brand element of your company. Do you diversify, by extending your reach into other areas of aerospace, or do you step back and say “well, our real purpose is to connect people, so lets invest in other ways to connect people outside of just flying them together”. It’s a tricky question, with no easy answer, which could mean botched acquisitions and a confusing marketing plan if you’re too broadly focused. However, tying in telepresence as part of the “connecting people together” strategy may mean infrastructure investments in aerospace communications networks, that you wouldn’t otherwise make, to allow video chats in airplanes while investing in smaller start-ups that focus on video codecs and compression algorithms that might net you a decent return down the line.

Focusing on just building airplanes though, Boeing would never invest in a Skype, but down the line will it be too entrenched to see a decline in aerospace with the will to shift their focus? Skype would have been a bad idea for Boeing, but what about investments in technologies that make it easier to transmit video which is entirely something they could leverage today? It’s not easy to do, and a lot of companies get it wrong here, but focusing your core message and internal alignment on something bigger than the immediate trend or fad is important, if you want to build a company that’ll be around 30+ years down the road.

If you do those three things successfully, whether you’re a city near the Ocean or a data analysis tool helping unlock value, you’ll no doubt continue to justify the value you bring long after that initial wave has past. It’s why Seattle continues to thrive, whereas cities like Detroit have struggled, and why Tableau is worth billions as a tool that accessed data without developing/ hosting/ managing most of the backend infrastructure that makes up those data systems. Stay beholden to only one path, or one product and you could go from the top of the pile to getting buried by your competitors. Toyota would say it’s not a car company, but a transportation company – because cars are only relevant for a period of time, but people will always need a way to get transported.

Become a digital “port city” by making a useful resource accessible and useful, then focus on continually evolving as the thing people need access to changes.

Share: Share on FacebookShare on Google+Email this to someoneTweet about this on TwitterShare on RedditShare on LinkedInPin on Pinterest

© 2017 DanMaycock.com

Theme by Anders NorenUp ↑