Most people are missing the boat on “business intelligence tools”
Here’s the foible with most discussions of business intelligence tools, IMHO. A lot of times, companies think they can throw a technological solution — i.e. business intelligence tools — at a problem (“pain point”) and it will be automatically solved. Here’s a classic example: “employee engagement.” What typically happens in that space is as follows:
- Executives barely care and lip service the concept for years
- Suddenly, there’s a revenue dip
- Someone in some meeting finds a way to tie that revenue hit to lowered engagement/morale, likely in the context of turnover
- Now executives care
- They kick the project to HR — “Don’t they own people stuff?” — and HR wades around in the deep end of adulthood for a while
- Vendor after vendor is chasing CHROs with some employee engagement software
- Finally the company buys a software suite to improve engagement and retention
- They install it
- There’s a rollout
- … the numbers stay roughly the same
You don’t solve employee engagement issues with software, because those are people issues. But many think you can. That’s one of the main problems with business intelligence tools. We toss square pegs (the tools) at round holes (problems those tools can’t solve), and then we get berated by higher-ups when the numbers aren’t coming in properly.
Maybe there’s a better way to approach business intelligence tools. Here we go with one concept.
Business intelligence tools: How is business changing?
If you’re truly going to evaluate pain points in a business, you need to look from two angles:
- Macro: Broader business trends and problems arising in your specific industry (i.e. disruption opportunities)
- Micro: Specifically, what’s wrong with your business?
This section will deal with macro. Here’s an interview with Dominic Barton of McKinsey. He’s the global managing partner. (A big deal.) If you’re a true salary-chaser, here’s a reason to respect his views: he makes a lot of money. So, in this interview, he outlines the four major global business trends of the next decade. They are:
- Business model redesign
- Organizational change
- Introduction of advanced analytics
- Emphasis on building resilience in business
Here’s video of his talk with UVA (that’s the first link above):
Let’s walk through this one-by-one.
Business intelligence tools: Business model redesign
Business model redesign is about fundamentally rethinking how you add value to a customer/partner. In short: you’re trying to solve the right problem. You look at a place like Apple (easy example). They are a tech company and make money from iPhones, sure. But they’re also becoming a health care company. That’s “business model redesign.”
What business intelligence tools would you need here? Well, there’s any number of trackers of what’s happening in your industry or broader trends you could make money from. You can buy research, partner with consultants, or use something basic like Excel or /r. “Business model redesign” as a concept is very much tied to the analytics portion we’ll address in a second. Essentially, in terms of business intelligence tools here, you need a way to track and understand what’s happening around you. That’s where new opportunities come from. They also come from the customer.
Business intelligence tools: Organizational change
This is about becoming leaner and flatter. Unfortunately, this isn’t really happening. Middle managers are crippling the economy and bureaucracy is exploding, even though we all should be getting leaner as automation continues to creep in.
There are studies out there which will tell you “organizational structure is becoming more important to executives,” and maybe that’s true. In most cases, though, it’s lip service. Organizational structure adjustments are a form of change management, and change management terrifies people. Executives mostly want to be seen as (a) competent and (b) relevant, and that’s been backed up by years of research. If you start going whole hog on change management, that might shift around some of their lieutenants — i.e. the people who make them competent and relevant. That’s terrifying to many people with decision-making authority. You gotta understand that.
So what business intelligence tools do you need for successful organizational change? Well, it ain’t no spreadsheet. You need self-awareness, the ability to see where stuff really isn’t getting done in your business, and sure, maybe you go hire a consultancy or two. Please, please don’t tell me that some software suite you bought from a vendor will make organizational change better, though. It will not.
Business intelligence tools: Advanced analytics
Most companies totally whiff on business metrics and performance metrics (both internal and external). The main reason? They try to be “an analytics company” without actually changing anything about how they operate. I don’t know much about animals, OK? But if I walked over to the zoo — I live near a zoo! — right now and said to the zebra, “You are now a lion,” there would be a few problems.
- The zebra cannot understand me.
- It would be very hard for the zebra to become/act as a lion.
- I would be seen as weird for speaking to the zebra.
And yet, this is what most companies do. “We’re an analytics company now!” or “We have a digital presence!” Um. No, you do not. To have a digital or analytic presence, you need to adjust the priorities and context of your people and the work they do every day. Otherwise, everyone comes in on Tuesday and does the same shit — even though there was a meeting on Monday where some COO said “we compete on data now.” Who cares? I got TPS Reports to file and my boss is on my ass!
Business intelligence tools for advanced analytics? How about you start with hiring the right people and looking at your website’s performance data in Google Analytics? You could also buy some automation software — gasp! — and track information in that before you get too advanced.
Business intelligence tools: Building resilience
To me, this means:
- Teaching your front-line managers that failure is acceptable within context
- Understanding how businesses grow and adapt to failings
- Having conversations around failure at work
It’s hard to find business intelligence tools in this category. Most executives would shriek: “Hire Simon Sinek to do a talk! He’ll inspire these rank-and-files!” No. That’s not an example of “business intelligence tools.” Sometimes you just need to talk to people and figure out where they’re at and what they want. In many situations, that’s the №1 example of business intelligence tools — i.e. the intelligence of your people, as opposed to some third-party software suite.
Business intelligence tools: What tends to happen
Take Barton’s four changes above, and the common reactions at most businesses:
- Business model redesign: “Let me huddle with my lieutenants for days, then wait four months to convey the new changes to those it will affect!”
- Organizational structure: “Isn’t that a HR thing? Let them handle it. I need my middle managers making the trains run…”
- Advanced analytics: “We compete on data! We hired a few Indian guys with good resumes just recently…”
- Building resilience: “Fluffy crap! We slay dragons and hit revenue targets quarterly!”
This is the problem with business in the western world writ large. There’s always an excuse. It’s always “That wouldn’t work for us” or “That’s the domain of another silo.” This is why so many projects run in pointless, no-priority circles for months before being disbanded with little fanfare.
And that’s the issue: these business intelligence tools we seek? They are often rationalizations. They’re the technology tied to the excuses. “We don’t have good structure? Let’s buy some software!” Sigh. It’s not the right way to think about business intelligence tools.
Your strongest intelligence comes from your people: what they know, how they interact with customers, and what they do all day. That leads to alignment and productivity, and that leads to strategy tied to execution. At that point? You start making lots of money effectively.
What else would you add on business intelligence tools?
My name is Ted Bauer. I feel like we spend a lot of time at work during most of our lives, and leave a lot of vacation days on the table, and maybe we can figure out how to make it better and more effective for us via research. You know? Like, does it have to suck and then you die? That shouldn’t be the deal. So that’s what I write about.