What non-quants need to understand in order to take full advantage of the results that quantitative analysis can produce
Almost everything most business leaders know about analytics they have learned from Tom Davenport and the material he provides in his books, notably in Competing in Analytics and Analytics at Work. In a more recent book, Judgment Calls, he and co-author Brooke Manville offer “an antidote for the Great Man theory of decision making and organizational performance”: organizational judgment . That is, “the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.” The more non-quants there are in a given organization, the better prepared they will be to take full advantage of the results that quantitative analysis can produce, hence the importance of Judgment Calls.
Davenport wrote Keeping Up with the Quants in collaboration with Jinho Kim to demonstrate how quantitative analysis works — even if (especially if) their reader does not have a quantitative analysis background — and how to make better decisions. “Analytics can be classified as descriptive, predictive, or prescriptive according to the given methods, [applications,] and purpose.” They examine three analytical thinking stages and how to apply them and then shift their attention to six steps of quantitative analysis. I commend them on their skillful use of various reader-friendly devices that include boxed mini-commentaries (e.g. “The Danger of NOT Thinking Analytically,” Pages 19-21), Worksheets, Tables (e.g. 5-1, “Data-mining software for finding patterns in data,” Page 140), Figures (e.g. 6.1, “The process of becoming a proficient quantitative analyst,” Page 156), a “Summary” at the conclusion of Chapters 1-13, and real-world examples of what can be learned (i.e. do’s and don’ts) from various and diverse companies and their experiences with quantitative analysis. These devices will facilitate, indeed expedite frequent review of key material later.
These are among the dozens of passages of special interest and value to me, also listed to indicate the scope of Davenport and Kim’s coverage.
o What Are Analytics? (Pages 3-5)
o What Do We Mean by Big Data? (6-7)
o Ways to Measure Variables (65)
o Key Statistical Concepts and Techniques (82-86)
o Telling a Story with Data, and, What Not to Communicate (98-101)
o Purposes and Types of Visual Analytics (107-108)
o The Four Stages of Analytical Thinking (132)
o Patterns in the Leading Digit — a Way to Detect Fraud (145-147)
o Quantitative Attitude (156-166)
o Quantitative Habits (166-175)
o Your Analytical Responsibilities (192-198)
o What Business Decision Makers Should Expect of Quantitative Analysts (200-201)
When concluding their book, Tom Davenport and Jinho Kim share their final thoughts: “First, analytical thinking and decisions based on data and analytics will plan an increasingly important role in business and society…Second, we hope you now realize that you can play in this game even if you are not a statistics or math whiz…Third, while most people typically think of ‘solving the problem’ as the core of analytical thinking, it’s only one of the steps that make for a successful analytical decision…Fourth and finally, many people believe that the world of analytical thinking and decisions is almost exclusively about numbers, rigorous statistics, and left-brain thinking in general. But the right brain needs to be seriously engaged as well.”
And don’t forget to buckle your seat belt.