BIG DATA TO BIG PROFITS

Map of Party Change Arrows from NY Times. Large red arrows show counties that moved to Trump in 2016 over Obama in 2012.

 

The 2016 Presidential election offers many valuable lessons. It shows that for many Americans, especially those in urban areas, there is a bubble. Living in a bubble is a challenge for sound decision-making and leadership.

The lessons embedded in the surprising results of this election remind me of leadership, decision-making, and even big data analysis.

The majority of polls predicted that Clinton would win. Indeed, even the published probability of Clinton winning was over 90% on the eve of the election. How can so many polls and predictors be so wrong? The triumph of big data failed. Or did it? A careful review of the polls tracked by Real Clear Politics shows that the LA Times and the IBD/TIPP polls consistently showed Trump ahead or tied. Virtually, every other poll predicted a Clinton win.

The lessons are important:

1. Truth is Not Revealed by Committee: Asking many people with the same perspective only amplifies the errors that they have and you have. Clearly, the polls that predicted Clinton, especially the on-line polls were subject to this error.
   • Key Take Away: Seek out experts, not averages or committees. Even Michael Moore predicted Trump would win Michigan. Remember the tragic result of the NASA launch team ignoring the input of the experts on the safety of the Challenger launch. The launch commander ignored an expert’s opinion.
2. Seek Out Disconfirming Information: Building analytical models that are influenced by confirmation bias and further do not search for disconfirming information lead to bad results – be it with big data or small data. More attention to the LA Times and IBD/TIPP polls would have made the results less surprising. Similarly, as some people saw the US housing crash coming, there is enormous value in seeking information that disconfirms your perspective and hypothesis.
   • Key Take Away: Don’t seek why you are right, but rather examine how you might be wrong. It is rigorous and leads to better decision-making, greater open-mindedness, and better insights.
3. Know Your Customer: Trump got closer to his customer and understood their issues and concerns. CEOs and business leaders have similar challenges. Get close to your customer and know what they want, think, and believe (about your product, your firm, and you).
   • Key Take Away: Rarely does your customer (or employee or constituent) tell you what is wrong. It takes work and deliberate effort to learn from them. Remove the language, “I think” and replace it with “What do you think?” Leaders listen and then react. The least effective executive seminars I have led are those where the CEO or leader tells the team what to do or think. It stymies the flow of information and creativity.
4. Challenge Your Perspective (Always): The best ideas and theories are those developed by defeating the counter-hypothesis. Proving yourself right is not as valuable as examining other theories as alternatives. Surprises, insights, and great discoveries come from challenging prevailing wisdom, ideas, and perspectives. Challenge your own ideas!
   • Key Take Away: Learning requires asking questions. Asking hard questions requires examining what you believe and why it might be wrong. Humble yourself and re-examine your ideas; it will make you a better decision maker.
5. Get Out of the Bubble: Staying in HQ behind your computer screen is easy. Walking the floor, meeting your workers, getting to know them in person, and getting to know your customers is work. For political and business leaders, it is easy to remain in a safe bubble and to support yourself with people that think just like you. It is a commitment to leadership and discovery to move outside of the bubble. Do it every day! Consider ideas with an open mind and look for insights that reveal surprises and discoveries in data and daily life.
   • Key Take Way: You only get out of the bubble if you want to do so. Successful leaders get out of the bubble. A simple test can help. Do you know the people that make your food or clean your office? Do you acknowledge them? Do you thank them? If not, there is a first and easy step out of the bubble. Acknowledge them, thank them and listen to them.

Leaders are identifiable to everyone in their organization. It is hard for leaders to get to know every employee or customer. However, if you do it with effort, you will earn great respect and admiration from those that already look to you for guidance.

There is a whole world outside of your bubble. Go find it!

Professor Walker provides keynote talks, seminars presentations, executive training programs, and executive briefings.

Recent talk topics enjoyed by clients have included:

“From Big Data to Big Profits: Getting the Most from Your Data and Analytics”

“Leveraging Artificial Intelligence and Automation at Work”

“Digital Strategy: From Data to Dominance”

“Success with an Inter-Generational Workforce: From Boomers to Millennials”

“FinTech, Payments, and Economic Trends and Outlooks in Consumer Lending”

“The World in 2050: Risks and Opportunities Ahead”

Exceptional executive training programs have included:

“Digital Disruption, Automation, Analytics, Data Science, the IoT, and the Big Data Wave”

“Master Course on Operational Risk: Measurement, Management, Leadership”

“Complete Course in Risk Management: Credit, Market, Operational, and Enterprise Risk”

“Cybersecurity Training: Prevention, Preparation, and Post-Analysis”

“Strategic Data-Driven Marketing”

“Enterprise Risk Management and the CRO”

Professor Walker has provided these talks and programs to leading firms and governmental organizations. Click here to learn more about his talks, references from clients, options for customized talks and programs, and details on scheduling a program for your organization.

About Russell Walker, Ph.D.

Professor Russell Walker helps companies develop strategies to manage risk and harness value through analytics and Big Data. He is Clinical Professor of Managerial Economics and Decision Sciences at the Kellogg School of Management of Northwestern University. He has advised the World Bank, the Department of State, SEC, IFC, multiple US Senators, and a host of corporations.

His most recent book, From Big Data to Big Profits: Success with Data and Analytics is published by Oxford University Press (2015), which explores how firms can best monetize Big Data. He is the author of the text Winning with Risk Management (World Scientific Publishing, 2013), which examines the principles and practice of risk management through business case studies.

Follow me at @RussWalker1492, bigdatatobigprofits.com and russellwalkerphd.com

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By Russell Walker, Ph.D.  -      
Russell Walker helps companies develop strategies to manage risk and harness value through analytics and big data. He has done novel research in data monetization and digital disruption and advises leading firms on these topics. As Director of Experiential Learning in Analytics and Associate Teaching Professor of Marketing and International Business at the Foster School of Business, at the University of Washington, Dr. Walker is an academic thought-leader on analytics. Russell Walker has developed and taught leading executive programs on Big Data and Analytics, Strategic Data-Driven Marketing, Enterprise Risk, Operational Risk, and Global Leadership. Previous to moving to Seattle and the Foster School, Dr. Walker was Clinical Professor at the Kellogg School of Management of Northwestern University, where he founded and taught many popular courses in analytics and risk management. His is the author of the book From Big Data to Big Profits: Success with Data and Analytics (Oxford University Press, 2015) which examines data monetization strategies and the development of data-centric business models in the new digital economy. He is also the author of the award-winning text Winning with Risk Management (World Scientific Publishing, 2013), which examines the principles and practice of risk management as a competitive advantage. Dr. Walker consults with firms on the topics of Big Data and Analytics, Data Monetization, Risk Management, and Business Strategy. Russell Walker can be reached at: russell@walkerbernardo.com @RussWalker1776 russellwalkerphd.com

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