Are You Clear What You Want From Your Analysis?

Many business leaders say that they want “actionable insights” from their data analysis, so that they can make “data-driven decisions.”

In personal decisions, we often have the same ideas. But many underestimate the groundwork needed to set up the analysis to deliver those benefits.

Terms like “actionable insights” and data-driven decisions” are no-brainers. Who wouldn’t want them? But they are often used as a substitute for the clear thinking needed to craft a specific question to start with. Google was always useful if you knew what to ask, but give it a vague question and you will get unhelpful results. The same goes for AI. By staying non-specific about what you want, you’re setting up the project and everyone involved for failure.

The key question to start with before diving into analysis is “What is it exactly that we want?”

That can be difficult to identify at the beginning, but take your cue from the scientific method as a framework for discovery, and start with a guess at what might be true. Without a hypothesis, it’s just too easy to never reach a conclusion at all. Worse, you can convince yourself of something that’s actually false, because you set up the wrong test.

I find that when you are looking for “actionable insights” you often have a lot more certainty than you realize. In a business environment the question generally boils down to “we’d like to make more money (profit and/or revenue) through better choices in a long list of possible domains.” You also might have some specific guesses about decisions that you think could be improved with the right information.

Naming those potential areas of opportunity is usually enough to get a better start with the analysis. For example, if you think you can make a million dollars through better inventory choices, that’s something you can dig into with the data. It’s specific enough that someone with domain expertise can confirm or deny the opportunity. In your personal life you might be comparing car purchases or evaluating job offers, but the same principles apply.

By knowing what actions you are working towards, useful insights come into focus. And once you’ve done that, you have a plan instead of a buzzword.