Why Hierarchies of Data in a Business Matter

thData, business, sales, insights, and revenue are popular keywords found in abundance around the internet these days.  As a Founder of my own company, I can certainly understand the need to focus on such keywords in daily, weekly, monthly, and quarterly discussions.

But, as a Data Analyst, not all keywords are created equal for each role in the company.  Let’s simplify and break the business hierarchies down to three levels, which have a direct impact on how data can be used:

  1. Executives: The top of the chain that defines long-term strategy, implementation, and overall decision making.
  2. Manager: The mid-level staff responsible for action of strategy, interfacing between the needs to the subordinates and the Executive teams.
  3. Operational: The largest population of the business with the responsibility to make it happen by pushing the buttons, interfacing with customers, and carrying out decisions hour by hour.

This three tier pyramid of decision making in a business is streamlined to illustrate key areas that any serious Data Analyst should have Continue reading

A Citizen’s Role in Politics

The world of politics has been a touchy subject for years.  Everyone has their own opinion on policies and laws that will continue to make this country great!  It is part of our duty as citizens to express our opinions and even act on those opinions as we see fit.  While the most basic action comes in the form of voting, the citizenry is responsible for making an informed decisions on which leaders we elect and which propositions we pass.

This informed decision needs to be based on research, debate, and internal contemplation.  However, the media is usually pretty quick to provide opinions for us that aren’t always in line with reality.  Recently, while having dinner with a friend, I uttered the words “Obama is a socialist,” which then triggered a far greater discussion on exactly what this meant and what actions by Obama support this.  I have to admit that at this time I couldn’t speak to any specific actions.  In fact, I was guilty of regurgitating a line from the media without doing my homework.  This shocked me.

Normally, I am a very well spoken individual who seldom says anything that isn’t founded in concrete.  While I admitted that I was at a loss and we moved on, that voice inside me (the responsible citizen voice) wanted to know if Obama is really a socialist.

The answer is no.  Socialism centers around an economy owned by the state and or geared toward a common ownership.  Of Obama’s policies that I am familiar with, none of them fit into this category.  In fact, after researching this issue, I discovered that Obama is a well respect “centered” politician who has acted for the good of the country, moving between democratic and republican ideals to move this country forward.

What started to truly stir my passion for understanding the situation of our government was a text I received from the same friend containing a link to a rather interesting article.  The commentary article by Spiegel Online titled, “America Has Already Lost Tuesday’s Election, Destroyed by Total Capitalism,” is a rather passionate, European view of what the America has become.

After reading the article, I took a step back.  While I agree that America is controlled more by total capitalist, part of me wanted to believe that even total capitalists wouldn’t act in a way that would jeopardize the future of America.  Then I realized that capitalism is far more about profit than long-term sustainability.

Taking a look at Apple, for instance, who has banked billions and billions of dollars while the American education system experiences a financial crisis is perhaps proof that there could be something to this viewpoint.

In addition, during Hurricane Sandy, hospitals were evacuated because their backup generators failed, yet a few blocks away, buildings beloning to major financial institutions were bright with light and had plenty of power to spare.  The contrast of this image made me slightly angry.

The third piece of information that this citizen gained in recent weeks, is a book by Thomas Mann and Norman Ornstein called “Its Worse Than It Looks.”  I came to find out about this book while driving on the freeway listening to NPR.  What really caught my attention was when the author equated House Republicans to American terrorists.  WHAT!

It seems the Republican party has done more damage to America’s future in the past few years than in the entire history of this country.  The Fiscal Cliff is a product Republican’s willingness to put their party over the good of the country, leveraging filibusters, and refusing to negotiate with the White House.   I couldn’t believe what I was hearing, let alone what I was reading after purchasing the book.

To make sure this wasn’t a Democrat’s way of condemning the Republicans, I did some research of my own and found that the circumstances listed in the book are true.  In fact, I found a fascinating website called “Republicans for Obama” that agrees with a fundamental shift in Republican policy.  Instead of voting for the good of the country, Republicans are now voting to destroy the White House and the President of the United States.

These bits of information have awaken my role of citizen in politics.   While I intend to vote for Democrats going forward to give them back the majority, I will also spread the word regarding the new American terrorists sitting in the House.

What does citizenship have to do with Data, Creativity, Patterns, and Inspiration?  Everything.  Citizens must collect data, understand patterns in politics, and find the inspiration to act creatively to form the future that believe in.

I am sure this post will alienate employers/recruiters (probably won’t be working with Apple anytime soon) and create some controversy within my family.  But, it is my role as Citizen of the United States to research, understand and speak for what I believe in.

What Makes a KPI Special

A key performance indicator (KPI) is a vital tool for an organization seeking grow smart profits, expand customer loyalty, and build a scalable workforce.  While many companies stick a chronological set of numbers on a chart to project it on a wall in front of stakeholders, the reality is what they are seeing may not be a true KPI.   Its just a number unless its special.

To be special, the number needs to have most of the following characteristics in common:

  1. Represents a hierarchy either by time, or by dimension
    1.  Example: Sales broken by Year, Quarter, Month, Week or even day, then sliced by Sales Region
  2. Directly actionable with each stakeholder holding a piece of the action.
    1. Example: Sales are down 15% from goal, Sales Managers, Marketing Coordinators, etc can all speak to how their actions influenced the number
  3. Has  common definition across departments throughout the company
    1. Example: A sale is an action by a user from a variety of channels and promotions that resulted in payment and excludes affiliates for instance.  This definition is signed off by Marketing, Customer Service, Sales, and Product.
  4. Does not include hidden meaning and/or does not hide a trend
    1. Example: A number compared year over year, month over month completely ignores a trend that can be alarming.  While sales could be up year over year, this metric could hide a sudden drop in sales from the beginning of the year.
  5. When displayed with other metrics on a dashboard, the number represents a part of the story and does not represent a conflict to other metrics.
    1. Example: A number is where a chart shows Sales sky-rocketing, but another chart shows New Revenue way down, and yet another charts show Average Deal Size (ADS) flat.  The three charts give conflicting information, so one or more can’t be a true KPI for this business.  In fact, in this case, Sales is the corrupted KPI as it does not conform to a standardized definition.
  6. Supporting data is transparent
    1. Example: Analysts should be able to review aggregate data that rolls up to the KPI for audit reasons.  It provides transparency and allows for drill down capabilities. Often the Analysts receive direct support from a data team are sourced from data sources throughout the business.
  7. The number evolves with the business
    1. Example: A number is just a number unless it can change readily with the business. A team supports the KPI, new data is added when created, and definitions evolve as the understanding of the business evolves.
  8. A goal can easily be set and tracked from the number
    1. Example: If the number is fully understood, a goal can be set and tracked against.  If you can’t answer, “Where do we need to be by the end of the Year?”, then its a number, not a KPI.

Throughout my career, I’ve seen numbers and I’ve seen KPI’s.  The most successful companies I worked with not only have a data team to support their KPIs, but they engage in regular discussions of the KPIs at all levels of the business.  Successful, scalable, and profitable businesses are the ones using special numbers at their core.

When was the last time you saw a number masquerading as a KPI?

Data Perspectives – Trial Users

One of the keys to getting customers hooked on your SaaS product is offering a free trial.  Letting someone experience your product for free for seven to thirty days is a great way to establish trust with the potential customer, let them experience the product, and also gain insight into how they will use the product (customer segmentation).

On a recent project, I was reviewing data for a client and noticed a very interesting pattern in the login histories (not really, but we will call it logins since the real data can’t be shared) for trial users.  This particular client offered a 7-day credit card trial with auto convert to a selected plan (i.e. monthly or annual).    What I expected was a nice curve from day 1, declining each day, relatively smoothly and then an increase in logins after conversion.

However, after summarizing the login data for the first ten days of service (including 3 days for the auto convert), I found a sharp decrease in logins from day 1 and day 2, as well as a blip on day 6. See the chart below.

What was even more fascinating is how the other analysts and “experts” at the company interpreted this data.  Some of the comments are below:

  • “Wow, people pay us and use less?” – referring to the drop is usage on day 8 after becoming a paying customer
  • “Those auto convert reminder emails are working, driving usage!” – referring to the increase in logins one day prior to trial end on day 6
  • “Looks like we need pay per login” – referring to the sharp decline in logins from day 1 to day 2
  • “If we can get the customer to use beyond day 4, we have them!” – not sure how this really fits in as we haven’t correlated logins with LTV, yet
  • “People are cheap” – referring to the people logging in on day 6 to use the product prior to cancellation
  • “If you are going to login to cancel your auto convert on day 6, wouldn’t you try the product one last time?” – again, referring to day 6

The chart is quite simple, a single line with 10 data points.  What isn’t simple is really what this data means.   In fact, I don’t think we can make a decision directly from this data. Rather we need to further understand what the trial users are actually doing on day 6 and how users with logins on day 7 compare to the users on day 1 (is this a bad a marketing channel).  It would also be great to dive into patterns of logins just prior to churn or trial cancellation.

What fascinates me the most, is not only the different perspectives on the data, but the deeper questions that come out of the data.  Data and customer insights are evolutionary.  The more you know, the more you ask questions and the more the decisions and knowledge evolve.

Working With Data

Data is the future.  The future will continue to see an explosion of data collection and an increasing need to digest it.  This is what the industry refers to as “big data.”   The ability of one company to collect, analyze and take action on large amounts of data can be a serious game changer in the marketplace.

Any stakeholder who seeks to be successful in their role will leverage data.  Given the imperfections of our world, the stakeholder may have access to a limited data set.  While the stakeholder recognizes their need for clean, accessible data, the IT and BI teams may be months away from delivering.

The stakeholder has has two choices: 1) throw up their arms, complain about the data and cause a ruckus, or 2) work with the data they have and make the best of the situation.

Throwing Up Their Arms

“The data is wrong!” yells the marketing analyst sitting in a meeting with IT and BI teams.   The IT and BI managers shrug their shoulders and reply, “then tell us what is right.”   The marketing analyst bangs her fist on the conference table in frustration.

Bottom line, stakeholders who don’t embrace even the worst data, does not understand how to measure their business.  I’ve seen exchanges between BI and stakeholders where data has been subjected to strict QA by the stakeholder, but the stakeholder has never referred to the data as wrong.

Work With the Data

Every stakeholder interested in a data set needs to have the long term picture of the business in mind and understand the KPIs and other metrics involved to manage their part of the business.  All data used in analysis are typically seen through the lens of the business KPI which provides the context.  Chances are a stakeholder would never accept a data set that is so far from the truth to be useless.

Based on my career, the best course of action is to work with the data you have.  Granted you might not be able to answer more complex business questions, but you will start a journey along a road that will get you there.  Take the data you have and create three lists:

  1. parts of the data set that works for your requirements
  2. parts of the data set that should be modified
  3. parts of the data set that are important, but not pertinent to the requirements

Your goal is to understand the ins and outs of the data you have and create a constructive list of actions that evolve your knowledge and the data set into a market changing analysis. Providing documentation on to help the IT and BI teams evolve your data and turn into your pot of gold is the best course of action.

Data is Not Static and Neither is Your Knowledge

Keep in mind that as you interact with data, ask questions, build more detailed documentation and draw correlations or disassociations, your data will have to change to follow your in-depth understanding. This is why maintaining a positive relationship with the team that you rely on is so important.

Iterations of data sets can be subtle and they can also be large.  Just remember, that the data you had for version 1 is NOT wrong compared to version 2.  When reflecting back on version 1, understand where you came from and that you are looking at a less evolved set of data.  Then you can laugh when you look at version 3 and wonder how you managed the business with version 1.

Working with data is an awesome thing.  It should be a fun, productive journey for both the analyst, IT team, BI team, and all stakeholders involved.   When you here the word “wrong” come up, defend the evolution of data and point out that perfect data sets don’t come out of thin air.

Where’s YOUR Documentation?

Any good reporting/analytics team in a company must have a foundation.  Whether the reporting/analytics team is in Marketing, Sales, Finance, or Customer Service, documentation is the foundation by which companies operate and communicate.

Without documentation there is no:

  • foundation to build reports
  • no defnition of data
  • no way of effectively communicating concepts
  • evolution of data understanding
  • reporting

For each employee working at a company, we have a responsibility to maintain documentation.  When the Business Systems team comes knocking with their questions of how your part of the business operates, you will be ready.

If you are presenting sales figures to the executive team, you NEED to have an understanding of what your figures include and don’t include.  It is your responsibility to understand your part of the business.

Even the janitor requires documentation.  What’s the sequence to cleaning the offices, how often do the desks and keyboards get wiped down, to how often they need to order toilet paper, maintaining an office for busy employees depends on documentation!

So, where is YOU documentation?