An over-reliance on tactical analytics can make you lose sight of your strategic objectives
Not too long ago I began building a wooden walk that led from the front of my house to our raised patio around back. The run itself was a straight line a little over 30 feet, so all I had to do was square the first wood plank with the concrete path up front and lay each subsequent board parallel to the one before it. The boards actually went down pretty quick and within a couple of hours I had a beautiful wood path… that was misaligned with the patio stairs by a good two feet.
Because I had been so focused on aligning the next plank with the one before it, I missed the fact that concrete path was not perfectly square and minor variations in the wood threw off that alignment just a little bit at a time, sending the walk veering off to the left by the time the boards were all in place. In other words, my short term aim, while seemingly correct, actually caused me to miss my long-term mark.
As I loudly cursed myself while pulling those boards back up, I realized that my little yard project was a good analogy for a lot of what we see going on in business right now using short term analysis to dictate action without regard for the effect on long term objectives.
Hardly a day passes where we don’t read about some new system ingests huge volumes of big data and spits out analysis on what to do in the next day, hour or minute. From social media sentiment analysis and dynamic product pricing, to real time traffic routing and congestion-based tolls on HOV lanes, we’re adopting more and more of these super-fast micro-decision systems to do what’s good “right now, right there” without much consideration for the cumulative effect over a longer period and a broader scope.
Sure, dropping the price of a product in real time may increase its immediate sales, but what if larger effect is to depresses sales of more profitable products, or condition customers to wait until the price drops? Yes, providing alternate routes helps avoid traffic congestion in the short term, but what if the long term effect is to raise traffic volumes on roads that are less safe or well-maintained, increasing accidents and vehicle wear and tear?
Analyzing the broader scope and impact of quick decisions is, of course, not what real time analytics are designed for. They are tactical tools meant to focus on narrow tasks and deliver the best information quickly.
The role of ensuring long term strategic objectives are met falls to traditional business intelligence systems that combine information from across the organization’s pantheon of systems and delivers a deeper, wider, longer-term view of the operation. By their very nature these systems are larger, slower and perhaps not as “sexy” as the newer big data analytics tools that deliver fancy visualizations and immediate gratification. But they are every bit as, if not more, important because sustained business growth depends on sustained, long term execution not quick wins. The ability to step back and see that path you’re building is going to take to you where you want to go really matters more than the dozens of little adjustments you make along the way.
Had I kept that in mind a couple of weeks ago, I’d probably be enjoying a cold drink on my patio right now.