As the concept of using analytics as a strategic advantage is gaining more and more traction, many organizations are asking the question:
How do we get started building our Analytical Team?
In an effort to quickly catch up, some organizations make the mistake of hiring too quickly and firing too slowly. These situations can be avoided with a bit of strategizing at the leadership level. Here are some tips that executives and leaders can use to increase their chances of success:
Tip 1: Develop shared goals on why you want an Analytical Team
Most organizations that have Analytical Teams complain that their team is juggling so many different demands that they don’t use them as much as they would like to. The teams are busy, but the question is … are they busy working on the most important things? So before even building an Analytical Team it’s worthwhile for a leadership team to crystallize their top 3 goals for having a team. It’s strongly encouraged to keep it focused, because you can take it as a given that people will find new ways to use their talents.
Example shared goals might be:
- To increase long-term customer retention by better understanding their buying patterns.
- To support the leadership team in making major decisions using evidence-based methods.
- To increase the cost-competitiveness of the organization.
It will likely require a brainstorming session or two to figure this out, but it is incredibly important ground work if you want to build your team right the first time.
Tip 2: Under each goal, identify one or two desired outcomes
To increase the clarity of what each goal actually means, next attempt as a leadership team to identify the specific outcomes that you’d like to target. These targeted outcomes would ideally be very tangible and expressed with numbers and an expected timeline. For example, if the goal is “to increase the cost-competitiveness of the organization” then some potential desired outcomes might be:
- To outperform the industry average in inventory holding costs by 10% within 2 years.
- To decrease in-warranty repair costs by $1m per year.
- To increase operational productivity by 15% in three years.
- To decrease the cost per customer acquisition by 10% on the next product launch.
The specific desired outcomes will often reflect the leadership team’s best educated guess, but that’s ok … the figures can be firmed up later, and in the meantime they further clarify the “what” and the “why” behind building an Analytical Team. You can imagine how this stage plays a big role in determining what talents and skills you will need for your team.
Tip 3: Estimate the value of achieving these outcomes
As shown in the previous example, it’s important to convert the desired outcomes into actual dollar amounts. This helps clarify how much opportunity the team believes is on the table. It also starts to paint a picture of what it’s worth to have the right analytical team. A safe approach would be to take the estimated total value per year from all three goals, and assume that 10% to 25% of them will actually be realized within the first 2 years. The resulting figure (total estimated value x 10%) will still likely be a much bigger number than you had planned to invest in building the team.
By using these tips, you can gain clarity on why you want an Analytical Team, the value you expect them to bring, and the cost of the team. By doing this pre-work you can significantly increase your chances of building the right Analytical Team the first time. In a future post, I’ll share some tips on how to recruit an Analytical Team.
There are many experts out there on this subject. Please feel free to weigh in with your point of view if you have something to add.