I was recently a presenter in the financial planning and analysis (FP&A) track at an analytics conference where a speaker in one of the customer marketing tracks said something that stimulated my thinking. He said, “Just because something is shiny and new or is now the ‘in’ thing, it doesn’t mean it works for everyone.”
That got me to thinking about some of the new ideas and innovations that organizations are being exposed to and experimenting with. Are they fads and new fashions or something that will more permanently stick? Let’s discuss a few of them:
Dashboards– Visualization software is a new rage. Your mother said to you when you were a child, “Looks are not everything.” Well, she was wrong. Viewing table data visually, like in a bar histogram, enables people to quickly grasp information with perspective. But be cautious. Yes, it might be nice to import your table data from your spreadsheets and display them in a dashboard! Won’t that be fun? Well it may be fun, but what are the unintended consequences of reporting performance measures as a dial or barometer?
A concern I have is that measures reported in isolation of other measures provide little to no context as to why the measure is being reported and what “drives” the measure. Ideally dashboard measures should have some cause-and-effect relationship with key performance indicators (KPIs) that should be derived from a strategy map and reported in a balanced scorecard. KPIs are defined as monitoring the progress toward accomplishing the 15-25 objective boxes in a strategy map created by the executive team. The strategy map provides the context from which the dashboard performance indicators (PIs) can be tested and validated for their alignment with the executive team’s strategy.
Business analytics– Talk about something that is “hot.” Who has not heard the terms Big Data and business analytics? Business analytics is definitely a next managerial wave. I am biased towards them because my 1971 university degree was in industrial engineering and operations research. I love looking at statistics. So, do television sports fans who are now provided “stats” for teams and players in football, baseball, golf and every kind of televised sport. But the peril of business analytics is when they don’t serve a purpose for problem solving or seeking opportunities. The analytics thought leader James Taylor advises, “Work backwards with the end in mind” (Stephen Covey habit # 2).
That is, know why you are applying analytics. Experienced analysts typically start with a hypothesis to prove or disprove. They don’t apply analytics as if they are searching for a diamond in a coal mine. They don’t flog the data until it confesses with the truth. Instead, they first speculate that two or more things are related or that some underlying behavior is driving a pattern seen in various data.
Machine learning and cognitive software- There are an increasing number of articles and blogs with this theme related to artificial intelligence – the robots are coming and they will replace jobs.
Here is my take. Many executives, managers, and organizations underestimate how soon they will be affected and the severity of the impact. This means that many organizations are unprepared for the effects of digital disruption and may pay the price through lower competitive performance and lost business. Thus, it is important to recognize not only the speed of digital disruption, but also the opportunities and risks that it brings, so that the organization can adjust and re-skill its employees to add value.
Organizations that embrace a “digital disruptor” way of thinking will gain a competitive edge. Digitization will create new products and services for new markets providing potentially substantial returns for investors in these new business models. Organizations must either “disrupt” or “be disrupted”.Companies often fail to recognize disruptive threats until it is too late. And even if they do, they fail to act boldly and quickly enough. Embracing “digital transformation” is their recourse for protection.
Fads or fashions?
Are these fads and fashions or the real deal? Are managers attracted to them as the shiny new toys that they must have on their resume for their next bigger job and employer? My belief is these three “hot” managerial methods and tools are essential. But they need to be thought through and properly designed and customized; and not just slapped in willy-nilly just to have them as shiny new toys.
