InReview – Issue 57

Super Crunchers: Why Thinking-By-Numbers is the New Way To Be Smart by Ian Ayres. New York: Bantam Books, 2007. 258 pp.

Ian Ayres is an econometrician and lawyer, the William K. Townsend professor at Yale Law School, and a professor at Yale’s School of Management. He has written eight books.

Today there is lots of data available and wonderful insight that can be developed from it. Unfortunately, according to Ayres, much of this data is untapped while too many managers rely on “intuitive” decisions. They are not aware of the opportunity made possible by low-cost storage, high-powered computers, and statistical algorithms that have been around for decades, if not centuries. In this book, his goal is to inspire leaders to see the potential of this capability and adapt to a more data-driven decision-making style.

The book is filled with illustrations. One chapter deals with government issues. Another deals with physician diagnostics and the data available for better medical decisions. There also are examples throughout the book on how data can support making better business decisions. The examples show how decisions rooted in data often can differ from decisions that rely on traditional intuitive approaches.

Ayres is careful to sidestep the automation trap. He is not suggesting that computers make better decisions than people. Rather, the insight that comes from careful statistical analysis on large data sets can bring new insight to the decision maker. Further, humans are needed in the process for questions they ask from the data. The book is fun to read and provides good insight to the leader not used to thinking with data.

Super Crunching is written in the breezy style of Freakonomics, making it fun to read but also bordering on salesmanship rather than science. For example, he analyzes large sets of college basketball scores revealing that Las Vegas point spreads are very accurate in predicting final scores, except in the case where the point spread is large. The data shows that with five minutes to go in the game, the real data fits very well with the point spread, but then the final score tends to be closer than the prediction. He suggests this indicates a sophisticated type of point shaving by the players. It could also suggest a coach who substitutes freely near the end of a game that has been won. Yet this alternative explanation is never mentioned. Another criticism of the book is that it strays from its objectives; it is more about statistical analysis of data, both large and small sets, than a broad discussion of data crunching tools for large data sets (cf. Competing On Analytics reviewed below).

In spite of these criticisms, Super Crunching can play the important role of motivating leaders who are not familiar with quantitative analysis of data. It is an excellent introduction to the topic.

Reviewed by Al Erisman

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Competing on Analytics: The New Science of Winning by Thomas H. Davenport and Jeanne G. Harris. Boston: Harvard Business School Press, 2007. xv, 217 pp.

Thomas Davenport is the president’s distinguished professor of information technology and mathematics at Babson College. He has written, co-authored, or edited 11 other books. Jeanne Harris is executive research fellow and director of research for the Accenture Institute for High Performance Business.

The thesis of this book is that data driven decisions can come from the often unseen data at corporations, opening the door to better decision making. So at first glance, this book deals with the same topic as Super Crunchers, also reviewed here.

But this is a very different book. First, the book focuses exclusively on business applications. The authors have done research on how effective data driven decision making practices are in business. Companies were surveyed about their analytic capabilities, and these survey results were correlated with actual financial performance. For example:

• 23 percent of low-performing firms had significant analytic capability, compared to 65 percent of high-performing firms.

• 8 percent of low performers valued analytic insights to a large extent, compared to 36 percent of high-performing firms.

Secondly, Competing on Analytics deals with a broader set of tools than statistical analysis. The book is organized around different parts of the business, and each chapter (internal processes, customer facing processes, etc.) lists applicable tools to the problems in the particular area, such as scheduling, routing, modeling, and capacity planning. Because of the breadth of coverage, the treatment of each topic is very general, focusing more on the business use and outcomes than on the technical aspects of the tools.

Davenport is best known for his work in enterprise systems. And while there are lots of analytical problems in enterprise analysis, these are different topics. I found that the book lapsed into enterprise discussions in numerous places, rather than staying focused on the topics related to analytics.

The primary value of this book, as for the Super Crunching book, is motivation. In the Davenport and Harris book, it will take a lot more to get to practical solutions, and even to have an in-depth understanding of what the tools can do. But this book should be very useful to those business leaders who are in the category of having little capability in analytics and seeing little value in the tools.

Reviewed by Al Erisman

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I.T. Wars: Managing the Business-Technology Weave in the New Millennium by David Scott. Charleston, SC, BookSurge Publishing, 2006; 420 pp.

David Scott gained information technology (IT) experience during a career in the U.S. Army, followed by IT management and consulting roles for Fortune 500 companies, government agencies, and private businesses.

This book is not the best business management or the best IT book you will have ever read, but it is an excellent business technology book. Scott does a great job weaving business and technology issues together in ways both sides can learn from and understand. There are several chapters on people management and project management that provide examples to make points clear from both technical and business perspectives. For example, in chapter 13, titled, “Ignorance — A Posture Business Can No Longer Afford”, Scott suggests what business doesn’t know can hurt it. He then goes on to explain why businesses need (1) an IT enlightened organization, and (2) a process to enable end-users to help one another on mundane

The first third of the book is arguably the most insightful. Scott provides clear examples (e.g., an anonymous company and the FBI) of the consequences of failing to measure your progress, and failing to have a clear vision of where you are headed. In each of these cases, the organizations failed to assess their current situations before strategizing where they wanted to go. This led to inaccurate assumptions, exaggerated assessments of capabilities, lack of accountability, and wasted resources, and failed projects.

Scott argues throughout that if organizations manage the business technology “weave” effectively, then they should succeed in closing divides, directing purpose, and achieving results. Closing divides means business and IT folks have a mutual respect and understanding of each other’s perspective in both business and technology decisions. I.T. Wars does an excellent job suggesting how to close divides — this is the book’s main strength. I.T. Wars does an adequate job explaining how to direct an organization’s purpose. A lot of the directing-purpose content is generic, except for chapters 13 and 14, which provide helpful insights. As for achieving results, that is left to the reader’s management of their own business-technology weave. By reading the book and following many of its suggestions, you should be on your way to achieving results, be they financial, technical or people (morale) oriented.

Many organizations experience disconnects between IT experts and business managers. I.T. Wars drives home the point that when business and technology people respect one another, business can prosper.

Reviewed by Ryan C. LaBrie

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Balancing Your Family Faith & Work by Pat Gelsinger. Colorado Springs, Colo.: Cook Communications, 2003. 141 pp.

Pat Gelsinger, at the time of writing the book, was the chief technology officer at Intel. He is the subject of the Ethix Conversation in this issue (p. 6), and a more complete bio can be found there.

This is a very personal story for Pat. He traces his roots to a farm in Pennsylvania, discusses his education, how he arrived at Intel, and his experiences there. He also develops his family and faith background, and brings them together in defining his present worldview.

Chapter 5 shows his analytical bent in resolving time conflicts between family, work, and faith. He keeps score! He developed a grid allowing him to record how well he is doing against his goals of balance, and providing the tools to discuss this with his family. He also shows how he developed his personal mission statement and what he does to stay the course.

It is written primarily for a Christian audience, with lots of biblical references supporting the way he thinks about particular issues. It could have been improved with a more focused editor. Yet the book offers a fascinating look inside the thinking of a fascinating person.

Reviewed by Al Erisman