There’s a hidden side to everything. That’s the premise of the New York Times best-seller, blog and recent movie, Freakonomics.
But it’s also the premise behind analytics. Organizations often find insights in their data, but they have to be willing – and able – to ask good questions.
Stephen Dubner was in Chicago recently speaking at the IBM Performance and IBM Finance Forum events. My colleague at IBM, Crysta Anderson, spoke with him about the truths hidden in data and how companies are applying analytics to their advantage – or not. See some highlights below.
Dubner finds it “encouraging” that companies are starting to really use their data, but he cautions against data for the sake of data. The rise in data has led to meaningless statistics, like the hemline index or Groundhog Day index. Such indices often reflect correlation rather than causation. As Dubner explained, if someone landed here from Mars and noticed that people used umbrellas whenever it rained, they may conclude that putting away umbrellas would stop the rain.
More data has also prompted more attempts at visualizing data, as seen by the plethora of infographics. While some people – including Dubner – prefer their data in tables, others want to see graphs or images to represent the information. But infographics have also made it easy to visualize those meaningless statistics, sometimes leading to bad decisions.
So how do we decide what data matters? And how can we best use the data at our disposal?
Read the rest of the discussion with Stephen Dubner at the Mastering Data Management blog.