BOOK SUMMARY 327 Winning with Data
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Summary written by: Anand Thaker
“The greatest enemy of business progress is
not ignorance, it is the illusion of knowledge.”
- Stephen Hawking, Winning with Data, page 8
Tomasz Tunguz, partner at Redpoint Ventures, together
with Frank Bien, CEO of Looker, dive into organizational challenges and
opportunities managing the deluge of big data in their book Winning
with Data. Many of the recently disruptive companies are leveraging data as
an operational asset and outmaneuvering the competition by removing the
bottleneck of access and use of synthesized data. Four core problems discussed
include breadlines (aka demand), obscurity, fragmentation, and brawls (aka
miscommunication).
The authors provide a high-level discussion of how most
teams and organizations can transform into a data driven culture, evolving how
people make decisions, collaborate and operate.
In working with data and intelligent systems for a better
part of my career, it’s been an interesting journey engaging with how various
companies in different industries can be led astray by this ‘ignorance’ which
Stephen Hawking refers to in the above quote. While there’s a bit of
self-promotion, the book delivers on a number of obvious and newly discoverable
case examples where operationalizing data has made a positive impact on visibility
and efficiency. In the progression steps outlined, the most common threads
revolve around simplifying access and improving data literacy.
The Golden Egg
Data Democratization
"When we say data-driven, we're talking about
companies that operationalize data….We were talking about workers who wake up
every morning and use data to tune their actions throughout the day."-
Winning with Data, page 37
The internet has enabled so many more people to share,
collaborate and innovate. Data democratization, a common theme throughout
the book, realizes the same broad opportunities for insights, decision making
and innovation.
Data democratization means breaking down various silos
and having access to data when and where it is needed at any given moment by
anyone. Security, a valid concern in data access, does require someone
dedicated to execute proper governance without stifling potential insights. The
authors describe this as an operational necessity to invest in building an
asset for any organization. Empowering more people increases the chance for
more revenue opportunities.
Gem #1
Recruit and Shape Your People
"We learn only when we have both the curiosity to
ask a question and the tools to answer it. To change our cultures, we should
celebrate and reward curiosity."- Winning with Data, page 71
Curiosity is a trait found in everyone within a
data-driven organization. These are the people who are willing to experiment
and investigate. Enabling these people with tools and encouragement for their
curiosity increases the overall learning of a team. Coupled with that curious
nature, having people who are open to asking the right questions improves an
organization’s learning about itself and the possibilities for growth.
These attributes remove the common business fallacy
stemming from a ‘HiPPO’ (high paid person’s opinion) where decisions are
dictated by seniority without evidence or consideration of facts. As the
authors bring to light, data not only serves to provide better decision making
for anyone at any level, but making the data work for you can enhance a
company’s ability to adapt and thrive.
One of the most interesting concepts discussed in the
book is the use of ‘gemba’, Japanese for ‘the real place.’ In the
business context, gemba refers to observing and executing on continuous
improvement practices where ‘value is created.’ For manufacturing, it is the
factory floor. Gemba is one of the core concepts that elevated Toyota to
becoming a leader in manufacturing. For SaaS based technology organizations,
value is created within the data. The concept drives consistency, reliability
and accuracy across teams in an organization. Support teams structured under
gemba can now effectively deliver data education and training for groups as
well as aggregate the needs of the entire organization.
Gem #2
Understand and Manage Data Bias
"...Illusion of validity fools us into believing
that gathering more data will help us predict the future better."- Winning
with Data, page 99
It’s in our nature to have data biases. Gaining awareness
training is imperative combat them. The book outlines some of the most common
in data literacy:
·
Survivorship – Survivorship bias materializes
when we omit certain data from our analysis. The remaining data, containing the
survivors, leads us to draw a faulty conclusion.
·
Correlation vs. Causation – While data may
move in tandem (correlation), both data sets may not truly explain the effect
of one another.
·
Anchoring – Anchoring bias occurs when you
are asked to consider a value before estimating.
·
Availability – If an event can be more
memorable, we believe it to be more probable.
·
Illusion of Validity – The belief that
gathering more data will help us predict the future better.
Hiring the right people who ask questions, and
encouraging data-driven discussions can improve better decision making skills.
While a high-level read, Winning with Data does
provide a great blueprint for how to tackle the data revolution within your
organization. The book could be better organized, but consider the topical
categories of tools, training, data, and people as you read or take notes.
Also, I would like to see more resources available of examples of companies
transforming data cultures for greater benefits. If you do follow much of the startup
ecosystem either for wisdom or inspiration, I highly recommend following Tomasz
Tunguz either on social media or via his personal blog.
Tunguz and Bien, while sharing the infrastructure and
tools to support a data-driven organization, emphasize that the real secret
sauce still comes down to the people first.
Who in your organization loves data enough to lead your
data-driven culture change?
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