The greatest leaders are as much a product of their time as they are a reflection of their skill. Without Hitler, what would we remember of Churchill? Without Xerxes, the legend of the 300 Spartans led by Leonidas would never have happened. Without the right context, even those with the greatest potential remain part of the peanut gallery, shouting epitaphs at those who wear the limelight.
Itâs in times of crisis that leaders emergeâtimes of change, times like the present.
THE FUTURE IS NOW
Our world is a fascinating one; weâre at an inflection point, one defined by big data and business analytics. What was once science fiction is becoming reality. Letâs be frank thoughâthat sounds pretty hackneyed. After all, hasnât everything been science fiction once?
This is true. Itâs also true, however, that science fiction is a deep well to draw from. A well where some ideas are so fantastical that it seems impossible that theyâll ever become reality. Asimov, a science fiction writer, for example, wrote speculatively of âpsychohistoryâ in his Foundation series.1 A form of mathematical sociology, scientists would use massive amounts of behavioral information to predict the future. Through doing so, they were able to foresee the rise and fall of empires thousands of years in advance.
As with all good stories, power always comes with constraints. Accurate predictions were only possible given two conditions. First, the population whose behaviors were to be modeled needed to be sufficiently largeâtoo small, and the predictions would become error-prone. Second, the population being modeled could not know it was being modeled. After all, people might change what they were doing if they knew they were being watched.
It seems fantastical, doesnât it? Still, this is fundamentally the promise of big data. We know more about the world than ever before. Many of those being watched are still unaware of how much things have changed. Between national intelligence, security leaks, and the potential of metadata, most of us are only just realizing how much information is out there. And, by analyzing that data, we have the power to predict the future in ways that people still canât believe. Amazon, for example, took out a patent in late 2013 on a process to ship your goods before youâve ordered them.2 Big data offers unparalleled insights and predictive abilities, but only to those who know how to leverage it. For most, getting value from big data is a challenge. However, the reflection of every challenge is opportunity.
Things have changed. And, itâs a rare leader who isnât aware he or she needs a plan to realize this opportunity. However, thereâs a twist. Itâs not just a good idea. Itâs not something thatâs going to happen. Itâs happening now.
Catalyzed by books such as Thinking, Fast and Slow3 and Nudge,4 behavioral economics is already blending data with heuristics and psychology to create new models to describe and influence consumer behavior. Recognizing the power of a scientific approach to analyzing information, the U.K. government established a dedicated Behavioral Insights team to take advantage of these ideas. Formed in 2010 and nicknamed the ânudge unit,â their goal was to blend quantitative and qualitative techniques to improve policy design and delivery.5
The model has proved to be a popular one. In late 2012, the Behavioral Insights Team went global through partnership with the government of New South Wales in Australia. In mid-2013, the Obama administration appointed Yale graduate Maya Shankar to create a similar task force.
Paul Krugman, winner of the Nobel Memorial Prize for Economic Sciences, credits Asimovâs vision of a mathematical sociology as inspiring him to enter economics.6 This vision of a future shaped by our ability to analyze information is becoming real. And, itâs changing the face of medicine, policy, and business. Thanks to constantly increasing analytical horsepower and falling storage costs, the cost of sequencing the genome has dropped from US$100 million in 2001 to just over US$8,000 in 2013.7 More than just being cheaper, every decline in sequencing costs puts us that much closer to truly personalized medicine.
Even the social web is sparking innovation. Facebookâs acquisition of Oculus, Instagram, and Whatsapp wasnât just an attempt to diversify. It was a deliberate attempt to stay engaged across all channels all the time. With over a billion people now on Facebook, itâs amazing what one can find by scanning personal interactions. Organizations like the United Nations (UN) are tracking disease and unemployment in real time through the large-scale analysis of social media.8 The Advanced Computing Center at the University of Vermont is using tens of millions of geolocated tweets in its Hedonometer project to map happiness levels in cities across the United States.9
The future is closer than itâs ever been. Taking the leap to Asimovâs psychohistory isnât as far-fetched as it once might have seemed.
THE SECRET IS LEADERSHIP
Itâs hard to ignore the potential of big data. Realizing it, though, thatâs tricky. For every successful project thereâs a mountain of failed projects. Few in the field have escaped completely unscathed. Anyone who says she has probably hasnât been trying hard enough.
If youâre reading this book, itâs a fair assumption that youâre interested in linking big data to innovation. The cornerstone to this is business analytics. Big data and business analytics go together hand in glove. Without data, there can be no analysis. And without business analytics, big data is just noise. Together, they offer the potential for innovation. Innovation, however, requires change, and change is impossible without leadership.
Without value, all of this is meaningless. Big data has the potential to make things more efficient. It can generate returns. It might simply answer âthe hard questionsâ that no one knows the solution to. Some of these benefits lead to internal value, such as productivity. Others lead to external value, such as revenue. Still others can lead to total reinvention through dynamic change. Not all of these are complementary. Because of this, harnessing the full potential of big data involves walking the tightrope between the dynamism of change and the stability of continuous improvement.
The secret behind success is leadership. Without it, itâs impossible to balance the opportunity for reinvention with the benefits of continual improvement. A strong leader can do more with access to limited capability than the best team can without a leader.
We donât yet know the final impact of big data and business analytics. We do know, however, that it will change things. Change in itself isnât new; we already live in a world where change has become so normal that itâs almost invisible. However, for reasons that are covered in the next chapter, big data is âbiggerâ than this. Itâs likely to cause large-scale industrial and social disruption not seen since the indust...
