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Make Better Decisions

Thomas Davenport: Harvard Business Review Nov. 2009

Sara Terwall 5/3/2011


Background Making Better Decisions

Framework for Improving Decisions Dos and Donts Key Attributes of Analytics Competitors Sources of Strength Moving from an Analytics User to and Analytics Competitor

Competing on Analytics

Discussion Questions



Named one of the Top 25 Consultants in the world by Consulting magazine in 2003. Named one of the 100 most influential people in the IT industry by Ziff-Davis magazines in 2007 and 2008. Directed research centers at Ernst & Young, McKinsey & Company, CSC Index, and Accenture. Thirteen books, including the first books on analytical competition, business process reengineering, knowledge management, and the business use of enterprise systems. Hundreds of articles and columns for such publications as Harvard Business Review, Sloan Management Review, California Management Review, Financial Times, Information Week, CIO Babson College, Andersen Consulting Institute for Strategic Change, Boston University School of Management, The University of Texas



In God we trust. All others bring data.

- W. Edwards Deming

Making Better Decisions

Framework for Improving Decisions

Four Steps
2. 3. 4.

Identification Inventory Intervention Institutionalization

Educational Testing Service Stanley Works

Industry Examples

Dos & Donts

Dont build a model you dont understand Make assumptions clear Practice model management Cultivate human backups Dont use a decision approach if it doesnt apply

Do we think this is true? Or do we know?

- Gary Loveman

Competing on Analytics

Key Attributes of Analytics Competitors

Widespread use of modeling and optimization

Capital One Progressive UPS Proctor & Gamble Sara Lee Moneyball by Michael Lewis

An enterprise approach

Senior executive advocates

Sources of Strength
The right focus The right culture The right people The right technology

Data Strategy Business Intelligence Software Computing Hardware

Moving from User to Competitor

1. 2.

4. 5.

Apply systems/analysis to a range of functions Top-down support of analytics from senior management Make fact-based decision making not only best practice, but part of the culture Dont just hire people with analytical skills, but the very best skills Manage analytics at an enterprise level

User to Competitor Cont.


8. 9.


Invent proprietary metrics Use your data, but also share with customers/suppliers Create a test & learn culture Commit to building your capabilities for several years Emphasize importance of analytics internally and externally

Discussion Questions

Of the 10 keys to becoming a competitor, which do you think is most important and why? Aside from those previously mentioned, what are some companies you think use analytics to their advantage?

What companies do you think could benefit from increased focus on analytics?

Which of the following is NOT one of Davenports four steps of decision making?
A. B. C. D.

Identification Inventory Inspection Institutionalization