Assuming that “past performance will predict future behavior” is a textbook example of linear thinking.
Two recent economic and political situations illustrate deficiencies in linear thinking.[i] We thought the economy was going to continue to improve in 2008, mostly oblivious to the sub-prime mortgage lending crisis and the ensuing “Great Recession.”
Human behavior forecasting is not a new concept. Facebook predicts what ads you are more likely to click on. Google suggests what you might be searching for. Netflix tells you what other shows you might like to watch. All of them are using the power of artificial intelligence to predict individual’s needs and preferences.
When analytics is done in a silo, the breadth and depth of the analysis will be constrained to the experience and expertise within that silo.
We find that organizations get more effective answers when working collaboratively as part of a team. Some improvisation is required to define business questions more broadly and integrate a wider range of data and insights from across multiple disciplines.
A surging competitor is dropping their prices by 20 percent. Distribution is dropping as a key retailer is closing stores across markets. A flood of new advertising tactics are becoming available. Which of these market changes should I respond to? How should I respond to them? How will they impact my business?