Using Powerful Questions to Drive Your Information Strategy

May 29, 2015

Rob Saker

Chief Data Officer

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Drought

A lack of information will lead to the death of your organization.

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Flood

Too much unfocused data can have a similar result.

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How do you provide focus to your information needs?

When focused, water has the power to cut through steel

Pictured at right is a 5-axis water jet cutting head that pressurizes water to up to 100,000 PSI.

Source: http://en.wikipedia.org/wiki/Water_jet_cutter

Why the focus on questioning?

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The signs that led to a focus on enquiry

Rising Costs

Out of Focus

Emerging technologies

Report proliferation

Data Abundance

Business Transformation

23,000. Number of syndicated reports and variations that were

proliferated at large CPG manufacturer.

Lack of clarity. “Capture everything” leading to debates about source instead of

relevance.

Systems, maintenance and acquisition. Increase in data leading to growth in costs.

Rapid expansion in tools to exploit information. HANA, R, Hadoop, NoSQL, Logical data warehouses, in-memory appliances.

70. Number of distinct data sources incorporated into

recent analytic model.

Desire to transform business models. Companies needing to transform, but being constrained by data and technical debt.

We have made the shift from scarcity to abundance of information, without corresponding progression in our design approach.

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Your great subtitle in this line

“What unique resource strengths does St. Petersburg have over every other city in the

world?”

Russian Offshore Technology Firm

Brewer Metric Standardization

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EBIDTA

Net Producer Revenue

Cost of Sales

COS Variable

Freight & Fuel

COS Fixed1,200Team identified, rationalized, and standardized metrics

down to a list of 1,200 from brewery operations to consumer insights.

Metrics

7 Identified 7 key performance indicators that we believe we need to control to drive the strategic objectives.

Topline KPIs

1.5Amount of time it spent beginning to end to drive adoption of the idea, not including metric standardization.

Years

Marketing Spend

SG&A

National Spend

Local Spend

CROSSMARK IS THE SMARTER WAY TO FASTER GROWTH.

Crossmark sits in a unique position in the market with direct engagement across manufacturers, retailers and consumers.

Consumers

Retailers Manufacturers

• Digital, social, experiential, affinity, panel, consumer incentives

• Hundreds of thousands of direct engagements

• Millions of loyalty/affinity card members

Helping manufacturers activate their products with retailers and consumers.

• Planning, forecasts, sales to retailer, promotion, digital

Helping retailers manage their store activities.

• POS, assortment, planograms, beacons, loyalty, digital.

• Billions of direct observation data points at retail per year

Manufacturer Data

Consumer Data

Retailer Data

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“The people who don’t ask questions remain clueless their whole lives.”

- Neil deGrasse Tyson

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Questioning and Our Brain

Divergent ThinkingTaps into the right hemisphere of the

brain that drives random pattern association.

Political BiasWhen faced with a difficult

mathematical question, people revert to their political bias.

Fight Against IntuitionCognitive scientists have published studies showing that people are unwilling to accept controversial ideas that contradict their previous intuition.

4 year oldsThey ask 390 questions a day, but that will be the high point in their lives.

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Questioning is an Unlearned BehaviorOur education processes discourage inquiry.

• Questioning isn’t taught in school• We reward students on developing “expertise,” which we define as memorization of

facts.• We hire people with advanced degrees who are “experts” in their field to drive our

critical projects.

Companies invest in candidates with advanced degrees and expertise. An expert is someone who has mastered a subject and therefore doesn’t need to ask questions.

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Consulting & Development Methodologies Discourage Questioning

Business ProcessHow will we integrate?

How will we do our work?

VisionWhere do we want to

compete?

MeasurementLorem ipsum dolor sit

amet, consectetuer adipiscing elit

Implementation

StrategyHow will we

differentiate ourselves?

Development

Organizational Inertia

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99%

Where your business lives day-to-day

Organization behaviour is a real world example of regression to the mean.

Existential threat

Ground breaking

innovation

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What is the cost of poor questioning?

Increased Time to Value

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Complexity increases the duration of every task

Month 1 Month 2 Month 3

Month 1 Month 2 Month 3 Month 4 Month 5 Month 7 Month 8

~7 month projectComplex approach

6 WeeksDefine

4 weeksDevelop

2 days data3 weeks

Test3-4 weeks

Rework2 weeks

Tune2 weeksBackload

4 weeksVolume Test

2-3 weeksReport

2 weeksImplement

Focused approach ~3 month project

4 weeksDefine

DesignData modellingData acquisition

4 weeksDevelop/Test/Rework

ETL developmentData replicationDatabase developmentUnit testing, integrated testingStatistical analysis modeling

Tune

Index build and rebuild

Aggregation and embedded calculation optimization

Testing and tuning

2 weeksReport developmentVolume TestData refreshEnd user acceptance

1-2 weeksImplement

Physical model replicationTesting

Backload

No backload, as all dev and testing against full data volumes

Increased Ongoing Total Cost of Ownership

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Maintaining data complexity reduces operational efficiency

Data systems

Additional server & storage costs

Additional Support Resources

Maintenance of additional indexes &

aggregates

Maintenance of additional ETLs

Software costs as you upgrade to faster CPU’s

Additional costs associated with growth of data, its

complexity and the compounding nature of

such issues

Loss of business productivity

Inefficiency costs

+

++

+

+

+

Over-buying data

+

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Complexity Decreases ProductivityIn absence of precision firms capture everything

Requiring users to enter extra data greatly decreases productivity and requires greater change management to enable.

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NestWhy can’t the “unloved

objects” in homes be smarter?

Box.comWhy can’t I access my

files anywhere?

AmazonHow do we remove

friction in the path to purchase?

WazeHow can we

optimize travel through real-time

traffic information?

Mint.comHow can we simplify and enrich personal

finance?

UberMore tightly manage supply and demand between drivers and

riders.

Missed Opportunity Costs Dwarf Productivity Losses

In an interview with Fortune, Jeff Bezos indicated that meetings with his senior executive team at Amazon begin with reading 6 page memos for up to 30 minutes. Participants spend this time absorbing every word.

“They have verbs. The paragraphs have topic sentences. There is no way to write a six-page, narratively structured memo and not have clear thinking.”

On the Kindle“Books, in my view, are too expensive. Thirty dollars for a book is too expensive. If I'm only competing against other $30 books, then you don’t get there. If you realize that you’re really competing against Candy Crush and everything else, then you start to say, “Gosh, maybe we should really work on reducing friction on long-form reading." That’s what Kindle has been about from the very beginning.”

• Amazon Prime• 1-click ordering• Pro-active shipping before items are ordered• Dash buttons• Same day delivery• Two hour delivery• Drone delivery

“How do we remove friction in the path to purchase?”

15,000% TSRTotal shareholder returns since 1997 IPO.

$90 BillionTotal sales in 2014.

426Number of items sold per second on 2013 Cyber Monday

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“Effective leaders ask questions instead of giving orders.”

- Dale Carnegie, “How to Win Friends and Influence People”

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THIS GENERATES ANSWERS AND

DRIVE BUSINESS DECISIONS.

THIS GENERATES ANSWERS AND

DRIVE BUSINESS DECISIONS.

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What is a powerful question?

They clearly define the issuePowerful questions clearly articulate the problem. They do not attempt to solve multiple unknowns simultaneously.

They drive outcomesPowerful questions drive decisions and outcomes. A question without an outcome is trivia.

Tips for developing effective and objective questions.

They are simpleComplex language and terminology is used to mask a lack of understanding. Good questions are simple and spoken in a language everyone can understand.

They are objectiveThey do not impose a bias on the inquiry process.

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Inquiry Process

DivergeUsed to explore possibilities outside of

the initial frame.

Strategic FramingIdentifying the key problem or

opportunity facing the business.

Factual/EvaluativeQuestions whose results can be directly measured.

ConvergeUsed to constrain questions after divergence to those which best align with the business objective.

Create Choices Make Choices

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“What business am I in? Or, what business should I be in tomorrow?”

Framing Questions

These questions should be tied to your overall corporate strategy.

• You must know who your customer is and their value to you.• A detailed assessment of the value you provide to them.• What business problem are we trying to solve?

Useful Types of Data• CRM data, with enrichment to enable classification• Financial data• Sales data, with enrichment to enable classification

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Divergent Questions

Divergent questions explore additional possibilities to ensure we have appropriate framed the question and explored adjacent possibilities.• Sales of soda vs. “share of stomach” ensures that beverage firms don’t become

narrowly focused.

Additional Types of Data• Industry sales• PESTLE trends (Competitive, Economic, Political, Legal/Regulatory, Technological,

Sociocultural)

“If I had asked my customers what they wanted, they would have asked for a faster horse.” - Henry Ford

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Convergent Questions

Convergent questions focus and prioritize those which are most likely to have a significant impact.

• Quantify by the size of impact and probability and prioritize

Additional Types of Data• Evaluative analysis for sizing and probability

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Factual Questions

Factual questions are those that have a direct answer. • Processes must be designed at the beginning to measure the answer to these

questions.

Additional Types of Data• Observation data

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Question Inventory MatrixProblem/Hypothesis/Question

Possible Driver or Cause

Analysis/Tool/Model

Data (What data set(s) best explains it?)

Timing/Availability

Responsible (Synthesizes Analysis)

Accountable (Decides)

Decision to Drive

Deadline

What is the incrementality of a new product launch? (EXAMPLE)

Media awareness

Marketing Mix Sales, Distribution, Media Actuals

2 months after event

Marketing Analysts

Brand Director Do we need to change our investments in the new product? Should we launch?

1/31/2015

Distribution Distribution incrementality analysis

Nielsen, POS, Manu Sales to Retailer (STR)

Week after event

Sales Analyst Sales Director

Should we launch the product?

Distribution execution & effectiveness

Store audits, Nielsen, POS

Week after event

Sales Analyst Distribution Manager

Where should we focus our distribution efforts?

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Conceptual Enterprise Business Matrix

Point of Sale

Wholesale Data

Distribution Data

Media Planning Data

Promotional Spend

Store Audit Data

Marketing Mix Analysis Yes Yes Yes Yes Yes No

Distribution Incrementality Yes Yes Yes No No No

Distribution execution Yes Yes Yes No No Yes

Analysis 4 Yes No Yes No No No

Analysis 5 Yes Yes Yes Yes Yes No

Analysis 6 No Yes No No No Yes

Capture, generate or acquire data once in a way

that satisfies across all questions.

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Conceptual Enterprise Business Matrix

Point of Sale

Wholesale Data

Distribution Data

Media Planning Data

Promotional Spend

Store Audit Data

Marketing Mix Analysis Yes Yes Yes Yes Yes No

Distribution Incrementality Yes Yes Yes No No No

Distribution execution Yes Yes Yes No No Yes

Analysis 4 Yes No Yes No No No

Analysis 5 Yes Yes Yes Yes Yes No

Analysis 6 No Yes No No No Yes

Model in a way that integrates data once for use across multiple questions.

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Validation Process

Measuring and analyzing the results are fundamental to improving an organization over time.

Repeat MeasurementContinue measuring results.

MeasureDid the result match expectations?

RepeatContinue executing against your hypothesis to capture a representative sample of data.

ExecuteLorem ipsum dolor sit amet, consectetur adipiscing elit sed do eiusmod aliqua.

Analyze

START

Measure results

Execute against hypothesis

Execute against hypothesis

Measure results

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Key Takeaways

Focus on Questions that Drive ObjectivesRemember that actionability is the key test of a powerful question.

Frame/Diverge/ConvergeUse the frame/diverge/converge process to ensure you aren’t becoming predictable or stale.

Tie Business Questions to Data DesignUse questions to tie to your enterprise data design.

MeasureQuestions should be designed in a way that allows for measurement, and measurement should be built into the design of processes.

Refine Questions Over TimeBusinesses are not static, nor should the questions we use to drive them. Analyze your ability to answer questions at regular intervals and refine them.

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THANK YOURob SakerTwitter: @robsakerrob.saker@crossmark.com

Sources and additional reading:

“How to Win Friends & Influence People,” Dale Carnegiehttp://www.amazon.com/How-Win-Friends-Influence-People/dp/1508569754

“A More Beautiful Question,” Warren Bergerhttp://www.amazon.com/More-Beautiful-Question-Inquiry-Breakthrough/dp/1620401452

“Before You Innovate, Ask the Right Questions,” HBR. https://hbr.org/2013/02/before-you-innovate-ask-the-ri

“The Second Machine Age,” Andrew McAfee, Eric Brynjolfsson, http://www.amazon.com/The-Second-Machine-Age-Technologies/dp/0393239357

“Inmon vs. Kimball – An Analysis,” Nagesh. http://www.nagesh.com/publications/technology/173-inmon-vs-kimball-an-analysis.html

“Relentless Practical Tools for Data Warehousing and Business Intelligence,” Ralph Kimball, Margy Ross. http://www.amazon.com/Kimball-Group-Reader-Relentlessly-Intelligence/dp/0470563109/ref=sr_tc_2_3?ie=UTF8&qid=1432841651&sr=8-2-ent

“Amazon’s Jeff Bezos, the Ultimate Disrupter,” Adam Lashinsky, http://fortune.com/2012/11/16/amazons-jeff-bezos-the-ultimate-disrupter/