Tuesday, September 25, 2012

Accepting that Managers need a vital Performance Management Process to sustain a business, who should define and manage the tools that make it work?

Last week I had the chance to sit in on a review of an Executive Information System used in a leading Power Utility. The implementation was done on a mature infrastructure covering end-to-end from ERP, finance and planning, considered as the whole bu

My latest piece

Friday, September 7, 2012

Use Big Data to Predict Your Customers' Behaviors

"It's tough to make predictions, especially about the future." So said Yogi Berra, baseball great and amateur philosopher.

Sensible (and amusing) as it sounds, his dictum no longer rings true. The Age of Big Data has arrived — and, with it, the ability to predict the future is increasingly a part of a new business reality. Whatever your discipline, doing business today means immersing yourself, and your organization, in a wealth of messy, unstructured, real time data from customers, competitors, and markets — and finding ways to use such data visibility to see what's coming.

Advantage lies in a capacity to predict the future before your rivals can — whether they're companies or criminals. Consider how the New York Police Department is using Big Data to fight crime in Manhattan. According to a series on Big Data in The New York Times, the NYPD and other big city police departments are using data-crunching technology to geo-locate and analyze "historical arrest patterns," while cross-tabbing them with sporting events, paydays, rainfall, traffic flows, and Federal holidays to identify what NYPD calls likely crime "hot spots." As immortalized in a "Smarter Planet" commercial from IBM, such insight can help deploy officers to locations where crimes are likely to occur before they are actually committed.

The beauty of such Big Data applications is that they can process Web-based text, digital images, and online video. They can also glean intelligence from the exploding social media sphere, whether it consists of blogs, chat forums, Twitter trends, or Facebook commentary. Traditional market research generally involves unnatural acts, such as surveys, mall-intercept interviews, and focus groups. Big Data examines what people say about what they have done or will do. That's in addition to tracking what people are actually doing about everything from crime to weather to shopping to brands. It is only Big Data's capacity for dealing with vast quantities of real-time unstructured data that makes this possible.

For example, retailers like Wal-Mart and Kohl's are making use of sales, pricing, and economic data, combined with demographic and weather data, to fine-tune merchandising store by store and anticipate appropriate timing of store sales. Similarly, online data services like eHarmony and Match.com are constantly observing activity on their sites to optimize their matching algorithms to predict who will hit it off with whom. The same logic is being applied to economic forecasting. For example, the number of Google queries about housing and real estate from one quarter to the next turns out to predict more accurately what's going to happen in the housing market than any team of expert real estate forecasters. Similarly, Google search queries on flu symptoms and treatments reveal weeks in advance what flu-related volumes hospital emergency departments can expect.

Much of the data organizations are crunching is human-generated. But machine sensors — what GE people like CMO Beth Comstock called "machine whispering" when I talked with her this past summer — are creating a second tsunami of data. Digital sensors on industrial hardware like aircraft engines, electric turbines, automobiles, consumer packaged goods, and shipping crates can communicate "location, movement, vibration, temperature, humidity, and even chemical changes in the air." As the volume of both human and machine data grows exponentially, so too will organizations' ability to see the future.

The net of all this is hardly a cold quantitative world. Rather, as marketers and machine systems learn more about our attitudes and behaviors, they're likely to achieve greater intimacy with consumers and customers than ever before. Yes, there is the risk of an Orwellian nightmare, if the inferences from Big Data become too intimate and too intrusive — and end up in the wrong hands. But there is also the opportunity to deliver services and marketing with unprecedented precision and accuracy, meeting and exceeding customer expectations in preternatural ways at every turn. Knowing the right time to deliver the right message (or action) in the right place before the time has come will bestow extraordinary power to those who wield such intelligence with intelligence. Use prediction wisely, and Big Data has the potential to make the world small again. That is every marketer's dream: getting closer to customers.



  • Using Market Research Just for Marketing Is a Missed Opportunity
  • Can Big Data Smoke Out the Silent Majority?
  • Retailers Turn to "Soft Surveillance" to Fight Customer Anonymity
  • What Data Can't Tell You About Customers
  • More >>

    It's coming, faster than you can crunch.

    More Vacation is the Secret Sauce

    For the first time in many years, I didn't take a vacation during the winter. It was a costly mistake. By the time I left for vacation three weeks ago, I was feeling spent. That's not a complaint. One reason for my fatigue is that The Energy Project has grown so rapidly during the past year. Managing our growth has prompted a whole new set of challenges.

    For the first two weeks of my summer vacation, I let work go almost completely, in part because I had nothing left to give and in part because I knew how valuable it would be to chill out. I played tennis and worked out. I spent time walking on the beach with my wife. Family members came for visits, and we spent a lot of time just talking on the porch. I also read a lot of books — mostly fiction, which I rarely do when I'm working.

    I did check my email occasionally, but I rarely responded. Each day, I felt a little more rejuvenated, much the way you sense your strength returning after an illness. In truth, I was hoping time away from the office might prompt some creative thoughts about our business, but for two weeks not a single interesting idea entered my mind.

    In the third and final vacation week, something changed. I felt drawn back to reading non-fiction, specifically to books related to my work. I reread Tribal Leadership, which makes a compelling case that the vast majority of leaders operate at sub-optimal levels of personal development, and that the higher the level they reach, the more successful their organizations become. I also read The Fear of Insignificance, an extraordinary book by the Israeli psychiatrist Carlo Strenger about how our behaviors are powerfully, unconsciously and often pathologically influenced by our deep need to feel we matter.

    These books, along with a couple of others, shifted my mind into high gear at a time when I was unburdened and undistracted by the preoccupations of everyday work. In short, I had time to truly reflect and think strategically rather than tactically.

    I also learned about the importance of vacations from observing others on our team. The intensity of demand had begun to wear them down, too, and it showed up in a collective tendency to be more emotionally reactive — shorter and sharper — and more willing to settle for an easy solution rather than do the hard work necessary to get the best result.

    I encouraged people to take longer vacations — we give four weeks beginning the second year of employment — and most did. Two of our employees (who happen to be married) went to Amsterdam for two weeks, fell in love with it and asked if they could work from there for a third week. They worked U.S. hours, set up their phones so clients could reach them dialing their regular office numbers, and it came off seamlessly.

    The result is we're headed into the fall with an office of people recharged and eager to face a busy season. The one employee who didn't get away, in part because she was overseeing our move to new offices, grew more and more exhausted until I finally told her she had to take time off. Literally the next morning she ended up in the hospital with an infection. The cause wasn't exhaustion, but I can't help believing it must have made her more vulnerable to illness.

    At a broader level, the famed Framingham Heart Study followed 750 women with no previous heart disease over 20 years. Those who took the fewest vacations proved to be twice as likely to get a heart attack as those who took the most. A 2005 study of 15,000 women found that the risk of depression diminished dramatically as they took more vacation. A 2006 Ernst & Young study found that for each additional ten hours of vacation employees took, their performance reviews were 8 percent higher the following year.

    The problem is that in the face of relentlessly increasing demand, we're collectively vacationing less and for shorter periods of time. What's the solution?

    • Take every day of vacation you're given. Don't hold it over and don't tell yourself the story that you don't have the time to spare. You'll get more overall work done at a higher level of quality if you take your vacations.
    • Take some sort of vacation (even if you stay at home) at least every three months.
    • Truly disengage when you go on vacation. If you don't, you'll be trading away the value of taking one. If you feel you have to answer email, set aside one short period to do so, and then disconnect the rest of the time.
    • Don't settle for three or four days off. Short periods are fine, but they're not sufficient. If you have an intense job, my experience is that it takes at least two consecutive weeks away from work to fully restore yourself.

    As they say, "Take every day of vacation you're given"