At a recent meeting I was asked about the difference between BI and AI. Surprisingly ‘they’re different letters’ wasn’t the desired answer. What’s the difference between Business Intelligence and Artificial Intelligence when applied to data analytics? I suggested that BI tells you who your top 50 customers are, AI tells you who your top 50 customers should be and how to get them there.
In an industry of engineers, we can’t help but fall in love with numbers. We love the logic and truth of numbers. The rules of math are simple. Some numbers are bigger, some are smaller. Numbers go up, numbers go down. And with that, we can make sense of the world. A nice, clear table of numbers tells you exactly where your business is today, and usually how it has changed from the last time you looked. Everyone starts each month wanting to see the numbers so they can know if they had a good month or not – doesn’t matter how they felt, the numbers are the arbiters of happy or sad emotions.
As such, we lean entirely on reporting for directing our workforces. People will respond to the numbers they’ve been provided. A few key numbers will impact how they think to approach their role until the next set of numbers become available. A report can provide a sense of comfort that things are going well and I can relax for a month, or they can provide a sense of urgency or uncertainty that everything I’m doing is wrong. The start of the month is like Groundhog Day. Will the report see a shadow or not?
I think it is important to move away from this kind of behavior, and to move away from the idea of numbers controlling the company. I see it all the time in sports – if you don’t win now in the NFL, you might be out of a job at the end of the year. If you allow too many points or can’t score enough points, you’ve gone wrong somehow. And yet we see great coaches who have huge success one year be questioned the next. Is the problem that the coaches' abilities suddenly changed, or are we wielding numbers the wrong way? Are they just a management shortcut?
The report is still the barometer, but for workforces, we need to encourage actions first. When we’re faced with a table of numbers, we all go through the same inspections – look for the highs and lows, the stable and unstable. This can all be done for us. And if it is done for us, it can be done consistently. Imagine for example, rather than presenting a salesperson with a report of their performance, they were provided a list of customers they should reach out to over the next few weeks, with direction on how to engage – defend current deals, prospect for new sales, reinforce appreciation for their business. The actions that we all know make the difference. No report made a difference to your results – the actions of people interpreting those reports are what move the needle.
When I started in the industry, I work for a manufacturer that had a growth rebate reward for their distributors. Soon, I asked why we needed to reward growth? Didn’t every single company already want to grow? Were we changing behavior, or just rewarding the fortunate ones while holding back on those that needed more help?
Shouldn’t we really reward the activities and actions that we knew led to success – training people, reviewing inventory, making sales calls, stocking new products? And so we changed the reward so you’d get a rebate for doing the right things, even if it didn’t lead to sales growth. Of course, it did lead to sales growth. There was a direct link between those who did more activities and their sales results. It seems common sense, but it was still a leap of faith to reward behaviors and not outcomes.
We’re entering an age where Artificial Intelligence will be able to diagnose results. It will review the numbers and provide us with a roadmap on how to move the needle in the directions we want. We could enter an age where you don’t provide measures to your salesforce. Instead, you direct them on what needs to be done – and reward them for completing those actions, having faith that the results will come.
This is a cultural shift, moving from a generation that lived by the report to a generation that doesn’t want to see the report. An age where the football coach survives a 4-12 season because they’re doing all the right things to build up the team and you know results will come soon.
I believe it is the right move – take the uncertainty of interpretation from the hand of your people. Not everyone should be a data miner or a power user. In an industry of engineers, we need to fall out of love with numbers and embrace targeted directed actions – the things we do each day to drive success. Advanced data analysis can write that script. We just need to learn to listen to it.
Having the ability to interpret the data obtained from the Market Data Program can give you the knowledge to take actions that ensure the future growth and the health of your organization.
Read Mark's first post, Big Data is is Everywhere. Are You Using it Correctly?
Mark McGready
Mark McGready has been working with data analysis for over 20 years in the electrical industry. For the last 10 years Mark founded and ran Jigsaw Systems Inc, a successful data analysis and process improvement company that focused on key sales and marketing challenges like SPA contracts, pricing matrices, inventory analysis and harnessing Point of Sale. Recently Jigsaw was acquired by SPARXiQ, formally Strategic Pricing Associates, in order to widen the services and capabilities available to the industry. Mark brings a combination of understanding data with a commercial sense of real world applications. His tools have generated millions of dollars in top line and bottom line results with his long list of clients.