Author: Nadine Touma Nadine Touma is a consultant in Insights, Strategy & Innovation based in Dubai. In her blog, Let’s talk business, she shares her 20 years of experience in the corporate world and 5 as an independent consultant with real-life stories, simple advice, and a no-nonsense approach that characterizes her work Original Post
Data, big data, data analytics, algorithms, artificial intelligence… All buzz words that have taken the business world by storm in the past decade, surrounded by an aura of mystery that seems to be only understood by a few chosen ones… And yet, in my humble opinion, the field of data is not as complicated as people in the industry are making us believe. Granted, you need advanced technical skills for certain inputs, be it programming or statistical, however, you do not need any skills in SQL, SPSS, or any other software beginning by S or finishing by X, to analyze the output, data, and draw what matter most for the business: insights.
No, what is you need is a certain mindset and a set of competencies that can be summarised as follows:
a- Thinking about the big picture
… Otherwise known as “strategic thinking” (it’s fancier). This allows you to rise above a sea of details and look at what matters most: patterns and results that will make a difference operationally or strategically. In my experience about one-third of accumulated data actually fits the profile which makes me question why companies are hiring more technicians to produce countless dashboards and millions of data points. But that is a debate for another article.
b- Critical thinking
As I will demonstrate in this post and the related ones, no data is to be taken at face value. None, zilch, nada. They always need to be questioned. Always.
c- Keeping the audience in mind
You do not address C-level the way you do operations or fellow geeks. If the latter has time for your complex detailed explanations on how you came up with your genius idea, the first two absolutely have no time for it and need to understand one simple thing: what’s in it for me? How is it helping the business I need to run?
d- Keeping it simple but not simplistic
I personally have no patience for obscure pseudo-intellectual presentations, reports, or books. In my view, the simpler and clearer it is, the smarter. It actually takes much more time to come up with a crisp 10-20 slide presentation than writing a 100-page report in font size 10. When that type of report is actually a PowerPoint presentation, I call it “death by PowerPoint”. It’s not only painful for your audience but they will leave you with absolutely no idea what you tried so hard to demonstrate. The world is a tough place indeed.
This series of 7 posts on the subject “Data are not insights” aims at sharing what, in my view, makes you go from simple data to powerful insights, pointing out common mistakes I have seen done repeatedly and debunking some myths surrounding the mysterious field of data.
In the spirit of my last point “keep it simple but not simplistic”, my posts will draw simple conclusions and advice, based on what I experienced in my career, with a touch of humor because… well… I can’t help it. Some points will seem obvious, and they are or should be, and yet I cannot count the times where they were not taken into account.
Forgive me for the long introduction, it is my first post, I need to establish some context and explain the perspective I am writing from. So onto the subject at hand: Data are not insights: Part 1…
Before addressing the art of insights (yes it is an art, not a science, more on this in a later post), I will talk about data in 4 parts, each developed in its own post:
Part 1: Beware the source!
Part 3: To trust or not to trust?
It is a no-brainer to point out that the quality of insights is totally dependent on the quality of data you are working with and yet I am always baffled by the simple fact that countless reports/presentations I read/attended never mention the source of the data. And yet…
Data are never right or wrong in absolute terms, they are always relative to the company or person that has collected them.
We have all searched for macro-economic data to frame and give context to our business plans, financial forecasts or presentations on any kind of topics… and stumbled upon different figures on subjects such as population numbers, GDP, growth etc. Shouldn’t we get a straightforward, common answer on such basic topics?, I hear you ask. No, we don’t. Because those subjects all include a part of estimation that is calculated differently depending on your source and that are dependent on the time such calculation was made (see Part 2).
Let me take an example. In 2019, I was delivering a project for a major UAE mall developer wanting to introduce a new beauty concept on the market. That project included many deliverables, from market analysis, concept testing, consumer behavior, to financial projections and strategic recommendations. My first report, Market Landscape, started with the key indicators of the UAE (as it always should frame properly the specific category you are analyzing). I had chosen IMF as my main source of data and was surprised to see a steady forecast of the population at 3% from 2015 to 2022 while we all know that the market registered a noticeable decrease on all fronts from 2015 to 2018 due to a shift of several structural factors that constituted what everybody dubbed as “the new normal”. As a consequence, all of us present on the market at that time witnessed the departure of many expatriates, making that steady growth of 3% absolutely impossible.
After scratching my head for a bit, and doing a bit of research, I realized that, although GDP and inflation figures had been corrected by the IMF on the period 2015-2018 vs previous forecasts, the population figures hadn’t, placing their numbers at 10.4M in 2018 while local sources showed a much more credible dip in growth 2015 to 2018 with an estimated population between 9.5 to 9.8 million in 2018.
You may argue that the absolute number was not too affected and we can all in all conclude that the UAE population at that time was more or less 10M and you would be correct. However, the fact that growth was actually negative and not positive was a bigger deal when you are trying to understand a market and later on a project on how much you can make on that market.
I could give you numerous examples like these, be it on macro figures, specific category market size and growth or else but you need to go back to work so I won’t. My main point in this first part, leading to how to draw quality insights, being:
1- Please, please always mention your source
Data can not magically appear in your presentation like a rabbit from a magician’s hat. They are always debatable and, as such, you need to mention where they come from.
2- Choose your source carefully
In my years as Head of Market and Consumer Intelligence for the Chalhoub Group, we developed lists, regularly updated, on the sources we were using depending on the topic, with notes on why, how, and when they were corrected. As per my previous example, even sources as reliable as the IMF can be inaccurate. And as experience will tell you depending on your field, some sources have to be used with a pinch of salt at best, or completely and utterly black listed, in the worst-case scenario.
3- Use your common sense and knowledge of the market
… to always question the data and its source. Take time to research it if it seems odd or counter-intuitive, cross-compare with other sources, and make your decision.
4- Remember that this particular set of data, with its specific source, will serve as a guide for anything you will do from then on
I recently delivered a project where I realized that the business plan for the introduction of a new franchise was based on a category CAGR (Compound Annual Growth Rate for people in the know) of 5.5% from 2018 to 2028… totally missing out on a little thing that happened in 2019 called, well, the pandemic with all its devastating effects on the economy and nearly all product categories (except for hand sanitizers that is). Was the source poor? Probably not. But the forecast was done in 2018 so… No, the category in question will most probably not reach $200M in 2028 but rather about $130-150M. Quite a big difference I would say for the cake you are trying to get a piece of.
You will notice that all my points about the source are tightly related to them when and how… leading us smoothly to Part 2: Accuracy is relative…
Author: Nadine Touma