The case of the missing diamond
21/04/19 - 14:37 Filed in: Thinking
Can you see it? The missing diamond? If you look really hard I think you will be able to spot it! The clue is in the text at the bottom of the photograph. If you can't work it out, I will drop some clues in my post and give you the answer at the end of the article.
I have written previously about the belief that capability with one particular tool leads to better performance. The pitch for visualisation tools like PowerBi and Tableau is that seeing the data graphically will reveal patterns and trends that we simply cannot detect when looking at numbers. And through a process known as voodoo we will therefore make better decisions. Actually, that is unfair. Predictive analytics is based upon identifying relationships between two sets of variables:
- explanatory variables
- predicted variables
Analysis of the explanatory variables is used to predict outcomes in the predicted variables. I tried to explore how that works in practice in this post. Clearly the accuracy of the prediction will be driven in part by the quality of data and in part by the assumptions about what really "explains" variation in the data set. My contention is that we need to acknowledge the impact of external variables that we may not be able to measure easily.
The point is that decision making is not a simple linear process like this; Facts + analysis = better choices. The next time you review a procurement strategy, consider what proportion of the strategy document is describing the situation, how much is analysis, and what is the interpretation of the output of the analysis.
For example, in early autumn 1970 a CIA analyst named Dino Brugioni looked at the photograph above (taken by a US U2 spy plane) of construction activity on an island called Cayo Alcatraz near the port of Cienfuegos in Cuba. Description would be that it is a photograph of an island. Analysis revealed the presence of multiple sports facilities on a relatively small island.
Interpretation is where things get interesting. For there to be so many sports facilities, there must have been lots of construction workers. To play soccer you need at least 22 players, so it was reasonable to assume at least 20 - 30 (relatively young) men were stationed on the island. What were they building? Was it connected to the jetty on the south side of the island? After all, Cienfuegos is a port. It was Brugioni's prediction that the photograph revealed something important, and within days the photograph was on National Security Advisor Henry Kissinger's desk, and a few days after that Kissinger persuaded President Nixon to make the decision to take action. Triggered by this photograph!
The point is that when we analyse spend data, or supply markets, we may well describe the data, and even use tools of analysis. But we also leverage judgement and experience to reach a decision. Tableau or PowerBI do not transform decision making by themselves. Interpretation requires knowledge, experience and wisdom. And there is no point looking backwards in time unless we use that knowledge to make better decisions about what to do in the future.
In the case of the photograph, Brugioni's analysis was that there were lots of sports facilities present on a small island, apart from a facility for the most popular sport in Cuba, beisbol. Why would there be a soccer pitch, but no baseball diamond? Why would the construction workers build permanent sports facilities? Because the base was being built by Russians. Cubans play baseball, Russians play soccer. Brugioni predicted that the facility would become a permanent Russian naval base, and escalated the advice immediately. Nixon's intervention stopped the construction of the Russian naval base, and it was never finished. The case of the missing diamond!
Cool story, bro, but so what? The 'so what' is:
When you analyse situations, there may not be a missing diamond, but there will be some facts staring you in the face and some facts missing.
Analysis is better than simple description, but analysis needs interpretation to make decisions
When analysing a situation, it is important to try to be objective about what is happening, and what is not happening
Interpretation involves synthesising multiple information sources to understand the 'what' and the 'why'
In this case, inductive reasoning is needed to 'join the dots' using information not present in the photograph
In many cases we will not have all the data we would like to have to make a decision
Experience, insight, hunches and 'wisdom' are part of the voodoo involved in making decisions in uncertain situations
Whether a spend analysis or a market review, we only look backwards in time to better inform our future choices
Our decisions are future-focused, and whether developing a category strategy or limiting the threat of nuclear war, if there is no action, there is no point
Visualisation tools are like the U2 spy photograph. They give us a new way at looking at a situation. But no tool can reveal what isn't there, and we all need to be as insightful as Dino.
Here is the island today, courtesy of Google Earth. Nature has reclaimed the island!