Big Data for a Higher Return on Luck

We all succeed for various reasons, luck included. We just never quite know when luck will strike. But we can be ready to respond and maximize its benefit. Big Data has its role in that plan.

In this video, UC Berkeley Management Professor Morten Hansen describes three traits leaders need to help their organizations thrive in times of chaos and uncertainty.

Taken together, they position outstanding leaders to “…get a higher return on their luck”.  New technology only accelerates this idea as Big Data, with it’s power to make sense of the larger environment as well as the enterprise, is a good luck gold mine.

1. Productive Paranoia

Bill Gates (institutionalize paranoia) and Andy Grove (Only the Paranoid Survive) are famous for this trait, which involves continually scanning the environment for threats and being prepared to meet them.  Leaders using Big Data have an advantage here.  Not only can they see a much wider view of their environment, but they also get a much more up to date picture of that environment.  In a rapidly changing world, this can be the difference between those who thrive and those that miss the strategic inflection point.

Quick example from my neck of the woods in Orange County.  In the pre-housing-bust days of 2005-2007, there were a myriad of sources – blog posts, comments, tweets, stories, detectable fraud pointing to the coming mortgage meltdown.  It was well known (and widely discussed) that many of these loans would never be paid back to the point that people commonly used terms like “suicide financing” , NINJA (No Income, No Job or Assets) and “liar” to describe popular loan products.

All of this unstructured data failed to fit into the neatly defined schema of the Fed’s computers.  The watchdogs missed the strategic inflection point and their regulators never showed up in time to prevent a crisis. Paranoia and Big Data capabilities would have gone a long way.

Imagine if Blackberry better understood the consumer response to the iPhone in 2007…

2. Empirical Creativity

As uncreative as data sounds, Big Data is another matter. Managing the broad scope of data available in and out of the firewall, enterprises can run low-risk experiments to test new ideas.  Market testing on a grand scale without betting the farm. Wine recommendation engine VinoEno’s story in this week’s HBR is a great example of experimentation, open-mindedness and remarkable creativity.

3. Fanatical Discipline

Any organization trying to get seriously involved in analytics has to focus its energies on getting the best data, the freshest data, and then be completely OCD about maintaining its integrity. What worked today won’t necessarily work tomorrow and laziness will have a high price.

The visionary of the future is able to see their ‘entire’ environment, filter out the noise, see the ‘lucky events’ and react faster and more effectively than others.

People will call it luck, but it isn’t, really.

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Categories: Data Analytics / Big Data, Disciplines, Strategy

Author:Tom Molyneux

A business process strategist with a focus on real-time event management.

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2 Comments on “Big Data for a Higher Return on Luck”

  1. May 31, 2012 at 10:11 am #

    Reblogged this on Fabless Labs.

  2. Jeanne Roué-Taylor
    May 31, 2012 at 10:22 am #

    Reblogged this on Fabless Labs.

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