Business experts say that analytics and data will define the difference between winners and losers in various industries. If you’re a manager and don’t have a clue about statistics or how to ask smart questions about data, it’s time to start if you want to thrive in your career and your organization.
Do you only care about statistics when discussing fantasy football? Is the only knowledge you have of data is how to spell it? If so, you better wise up – fast.
While data and statistics are changing the way companies like Google and Amazon do business, they also are impacting industries from manufacturing to health care. Managers and employees who are clueless about the subjects may find themselves standing on the sidelines as key projects continue without them or senior leaders pass them over for promotions.
Susan Athey, a Stanford Graduate School of Business economics professor, has consulted for companies like Microsoft and other technology firms. She says that while these companies require their managers to be knowledgeable about data collection and statistics, it’s a trend that’s starting to seep into other industries.
She explains that more companies are collecting and analyzing data as a way to stay competitive and innovative. It’s been shown that when companies inject data and analytics deep into their operations, they can boost productivity and profit that is 5% to 6% higher than the competition.
In other words, managers can no longer just ignore Big Data or trust the IT department or an outside firm to deal with it. If they value their jobs, they need to become more informed.
For example, data can show whether the price point on a product needs to be altered, whether to open a new store in another city or if television marketing efforts are failing. But if you’re a manager in marketing or sales, then being clueless about that data means you can’t ask smart questions – or know when there’s a problem, Athey says.
In addition, while your company may not be collecting a lot of data right now, what about your competitors? Your suppliers? Are others collecting data and making decisions based on data analysis that will eventually impact your product or business?
“I think it’s a smart idea to become more familiar with data and statistics,” Athey says. “There are free online courses, or you can go to executive training sessions. If you’re getting your MBA, go take a programming or statistics course.”
Athey says she isn’t suggesting that all managers become fluent in statistics or data analysis, but she says “you want to be able to look at data instead of waiting for someone else to interpret it for you.”
Keep in mind, she says, that while someone in IT may understand the more technical aspects, they may not have your knowledge of a business’s strategy or grasp the importance of certain information to a key project. So, it’s important that leaders at any level “have an understanding of what kinds of questions they should be asking” when they’re being presented with analytical information, Athey explains.
“It’s very important that you be fluent enough so you are confident to ask those questions,” she says. “You need to commission analyses that make sense. You can’t let the mumbo jumbo slip through.”
Athey says the price of not understanding data and analytics can be costly for companies. For example, she says she knows of one case where a “large amount of money” was spent on marketing programs, but it turns out that the benefits were being overstated.
“No one stopped spending because it was a very technical team running the program,” she says. “In other words, it was a very sophisticated machine that was told to do the wrong thing.”
She cautions that any statistics or data expert should be able “to explain what they’re doing in plain English – and if they can’t, then it’s suspect. You need to be able to spot a good answer, and one that is bogus.”
If a manager believes he or she isn’t up to the demands of understanding or questioning analytical information, Athey says they should cultivate someone on their team who shows such insights. This team member should be invited to key meetings to help ask questions and determine the strength and validity of the data and statistics that are being presented and interpreted.
But managers who choose to tackle these areas themselves and become more knowledgeable will certainly see their hard work pay off, she says.
Athey has commented before that in her experience, “MBAs who have good business institution but can also speak the language of the statisticians intelligently are rock stars.”
Such people, she says, “are poached by other firms and quickly promoted. They’re giving executive presentations and are the go-to people on any sort of major strategic projects.”
Further, Athey believes that becoming the go-to manager who understands data and can speak the language is an excellent career opportunity for women, who are already seen as good communicators. By grasping more technical subjects, she says, they will be primed to be invited to more executive meetings – and reach the C-suite with such talents.
“There’s a lot of upward mobility and early executive visibility for those in analytics,” she says.Posted in Agility, Strategy | Tagged analysis, data, statistics, technology