Adopting analytics, power, and agency conflict

An organizational decision process combined with a culture which invites challenge via experimentation is crucial. Davenport & Harris’s book ‘Competing on Analytics‘ (as well as new title ‘Analytics at Work‘  ) highlights that technology, skills, and process are simply not enough: at some point strong management support and a facilitating organizational ‘culture’ is needed to bring the power of advanced analytics to bear.

Lavalle, Shockley et al in ‘Big Data, Anlaytics and the Path From Insights to Value‘  also supports this notion that strong leadership combined with an organizational culture which supports structured, logic-based decision making is a prerequisite to implementing a strong analytics program.

The notion of analytics-oriented management stands in opposition to ‘instinctive’, ‘from-the-gut’ management, often linked to strong top-down control structures, which is otherwise the dominant modality for many organizations.  This is especially the case in the context of family firms (approximately 80%of world-wide businesses) and firms driven by hierarchical, shareholder wealth.  There are strong agency issues surrounding decision-making rights: for many top-down managers, the notion of giving rights over to structured analytics is simply tantamount to losing control and prestige.  Quite simply, many managers, consciously or unconsciously, are quite concerned about giving over control to processes or mechanisms outside their direct grasp.  However, the mounting evidence is incontrovertible: analytics-focused firms outperform:  they outpace competition and generate wealth for owners disproportionately.