Ambiguity and uncertainty are your friends

If you are a business analyst or are responsible for enterprise performance and risk management, then ambiguity and uncertainty are your friends. Why? If getting answers were easy, your salary would probably be lower!

The search for surprises

Regardless how analytics might be defined there should be no argument about what its purpose is – better insights and better decisions. If we takes this reasoning further, we realize that analytics has much to do with problem solving and testing. It is about investigation and discovery.

I am stimulated to write this piece as a direct result of attending the annual conference of the American Association of Accountant’s Management Accounting Section. This group is comprised of university accounting faculty involved with teaching students and research. About three hundred attend it. Although I am not a professor or have a Ph.D., I have attended this conference about ten times since 1995 because the presentations, mainly research papers, stimulate me. Some topics are a bit esoteric for my taste, such as “The role of persistent information asymmetry and learning by doing,” but there are always a few gold nugget ones that excite me.

For example, one presentation proved that in charitable fund raising, the announcement of a wealthy donor’s matching grant substantially increases donations from others (no big surprise) however counter-intuitively increases of the match from “one to one” to multiples of more than one has no effect.

That is an example of what analysts and researchers seek – surprises. Having a surprise is not essential. Typically analysis simply confirms a hypothesis. But what drives analysts and researchers is to prove that just having a hunch or intuition for decisions is not good enough. They know if you do not test something that may be intuitive, then others will continue to believe that the something is untrue! If their hypothesis is confirmed, that is fine; but if the conclusion has surprises, then new knowledge has been uncovered.

The quest for the truth

At this year’s conference, I was impressed by the passion of the presenters, and especially their innovative ideas. Make no mistake. These scholars are not financial accountants who produce external reports for investors, bankers, and regulatory agencies. These professionals have dedicated their lives to a combination of educating future CFOs and hypothesizing research and testing for results and conclusions. They explore social, economic, and political problems.

The younger faculty’s career advances depend on demonstrating good research, and the older ones maintain respect from their peers by acting as “discussants” following each research paper’s presentation. The latter one’s role is basically to provide constructive criticism and describe how the research contributes to the body of knowledge.

Analytics not only proves or disproves hypothesis, but its truth-seeking tests can also reveal cause and effect relationships. Understanding causality serves for making better decisions. Ambiguity and uncertainty? The greater they exist, then the more challenging the problem for an analyst and researcher to undertake. They can be an analyst’s best friend.

Source: https://customerthink.com/ambiguity_and_un...