Analytics and Witch-Doctoring: Why Executives Succumb to the Black Box Mentality

J. C. Herz (Batchtags LLC)
Executive Summit
Location: Mission City B1
Average rating: ***..
(3.43, 14 ratings)

This presentation is part of the "Executive Summit":http://strataconf.com/strata2011/public/schedule/detail/17165.

This Clay-Shirky-Meets-Will Wright-style presentation, heavy on images and brain-popping visual narratives, lays bare the dark underbelly of analytics in the enterprise. Drawing on darkly humorous experiences (both personal and from colleagues in other analytics companies), the speaker will unpack the unacknowledged blind spots of senior executives, who are hired on the basis of their leadership ability, when it comes to analytics (either from their own in-house quants or from outside vendors).

For a variety of reasons, a lot of high level Deciders who confidently grapple with strategic issues from technology development to partnerships and marketing, are stymied by the prospect of building analytic competence within their organizations. They know that analytics can be very powerful. But partly because of their own checkered history in math, and partly because of the black box mystique cultivated by vendors, they don’t understand how analytics work.

When something you don’t understand is mysterious and very powerful, there are two responses. The first is to understand how the thing works, so you can evaluate its applicability. The second is to assume that because it involves arcane knowledge beyond your ken (Greek letters! Formulas! Ancient Runes!), that this very powerful thing is an occult phenomenon. Make sure the masters of it are treated with great respect, and accept what they say is revealed truth gleaned from an inaccessible plane. Analytics have the veneer of logic and rationality. But in practice, they are treated like the reading of entrails.

I have personally been in situations where an analytics team offered to explain what we were doing and how it worked, and been told, “No, don’t tell me how it works. I don’t care, and besides, I probably wouldn’t understand it.” All we needed to do, it was explained, was find a magic nugget of truth and forecast the future. He may as well have said, “I don’t need to know how those throwing bones work! Just throw them and tell me the future!” A colleague at another company was once told by a CEO, “Build me an analytic engine!” What, she asked, did he want this analytic engine to do? Much hand-waving ensued, but no answers beyond “analytic stuff!” and “competitive advantage!”There are very few analytics people who’ve been in the business for any length of time who have not had this experience. We are, for all intents and purposes, witch doctors in the enterprise. And to some degree, we are invested in the mystique of that role.

This talk will bring executives into the Light. It will go to the core assumptions of why a company should do analytics in the first place. The talk will split out the main categories of business problems that are suited to quantitative analysis, and the process of determining which of these problems are strategic and which are grad school exercises that are intellectually interesting but will not affect the bottom line (except for the bottom line of solutions providers). The talk will also list out some important questions and litmus tests for the witch doctors – questions that prove they’re in the position to deliver business value.

Photo of J. C. Herz

J. C. Herz

Batchtags LLC

J.C. Herz is the CEO of Batchtags LLC, whose analytics engine, Tripledex, allows individual and institutional users to explore, build, and share information about highly interconnected networks of people, organizations, partnerships, and other transactions in an intuitive visual interface. Tripledex provides software and services to both Fortune 500 and government clients.

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Comments

Shoshanna Budzianowski
02/01/2011 4:42pm PST

All truths!

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