Well, more than a century ago, Louis Pasteur said, “in the fields of observation, chance only favours the mind which is prepared…” Leveraging this thoughtful approach in his field of microbiology, Louis Pasteur went on to discover the principles behind vaccinations and pasteurization. From Pasteur, we gained monumental scientific breakthroughs surrounding germs and disease, as well as a truism that remains today, Chance favors the prepared mind. This statement, Chance favors the prepared mind, is as much of a reality today as it was 150 years ago when Pasteur was doing his work. Modern businesses are flush with observations – or data, and expectations are rocketing for leaders to recognize real business insights from this data.
The term, Big Data, has become the buzzword for this opportunity. Big Data recently emerged as a leading business strategy, propelled by the intersection of three trends: the annual doubling of computing power, the falling prices of data storage, and the miniaturization of data sensors. Together, these three capabilities allow us to track anything and everything that is happening to and within our businesses. The challenge is to equip our employees and partners with prepared minds, so that chance favors our finding the next key insight – or big idea.
Here at Cervello, we’ve recently completed an analytics project with the sales organization of a major consumer packaged goods (CPG) company. Our program sponsor, the regional sales executive, asked us to create an Operational Scorecard for the twenty countries in his region. The goal was to provide a common way to quickly review, surmise, and discuss both the performance results as well as the key business drivers for each of the company’s brands, channels, and markets (the countries). The sponsor was leveraging this scorecard as the backdrop of an active dialog around the company’s key performance indicators – a dialog that would create prepared minds in his field operators and leadership alike.
To successfully create the scorecard, there were three key components: 1) the metrics, 2) the visualization, and 3) the dialog. First, the team had to define and select the appropriate metrics. They decided to provide both lagging indicators (i.e., outcome metrics) and leading indicators (i.e., business drivers) of performance. Being a CPG company, they decided on some financial metrics, market share metrics, and purchase penetration metrics for the outcomes. For drivers, they decided on some in store performance metrics like the 4Ps of marketing, some product distribution metrics, and key on-line marketing indicators. The intent was to provide enough context so that their brand or channel managers could understand the basic performance, good or bad, of how their products were performing in their respective channels (i.e., big box retailers, pharmacies, etc…).
Secondly, they needed to provide a user experience that allowed these managers to quickly understand the data. The online interface needed to be both scannable and drillable, so users could quickly ascertain performance and explore the details behind the performance. To achieve these purposes, Cervello consultants developed the main scorecard using Birst, a cloud-based business intelligence and analytics platform. The scorecard was designed with green and red traffic lighting as well as spark lines to indicate historic and forecasted performance trends.
Thirdly, a formal dialog needed to commence. The final step in all information platforms is to create a rhythm of review that spurs on analysis and dialog about performance – not only what happened, but also hypotheses about why it happened? Without a constant dialog on observations and hypotheses, learning cannot occur. Therefore, it is critical that the organization create a learning platform around the scorecard. In this case, the sales executive of our project required quarterly meetings to review performance and discuss operational plans for the future.
In conclusion, we are all awash in data. The way to turn this data into insights is through creating prepared minds in our organizations. To do this, we need to provide platforms of information, like operational scorecards, that allow, if not stimulate, an active discussion about what is happening and why? If we do, we can create a culture where chance favors… insights over data!
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Author: George Veth