‘Insight’ is a word that’s often heard in business but is frequently used flippantly. It is equally likely to be misused or at least misunderstood by many in the organisation. As is often the case with business terminology, it is used to describe what is needed but rarely achieved. It is also often viewed as a contradiction in terms by employees watching their leaders create strategy. Much of this has to do with the way the term is interpreted, as, like many terms, it is not clear cut – it is not even a word that translates well into other languages. I have actually worked with a Director of Insight for a company where they themselves were unsure how to define the term.
However, the problem with the concept of insight was highlighted to me while listening to the news and hearing such claims as ‘a third of companies will leave the country after Brexit’ and ‘we throw our clothes away after an average of five weeks’. Since there are 5.7 million companies in the UK, are 1.9 million really leaving? It seems that, for the first claim, some figures from the Institute of Directors were misconstrued. For the second claim, the statistics actually pertained to dresses for special occasions. So, both statements were inaccurate but spread easily, perhaps influencing the insight and decision-making in companies.
What leads to insight?
I am reminded of two classic quotes. The first is from Douglas Adams’ The Hitchhiker’s Guide to the Galaxy where ‘Deep Thought’, the supercomputer, is asked the ‘answer to the ultimate question of life, the universe, and everything’. The reply is of course famously ‘42’, but Deep Thought also adds that the answer seems meaningless because the beings who instructed it never actually knew what the question was. So, knowing the question is an important starting point for gaining insight.
The second is from Charles Babbage, who originated the concept of a digital programmable computer in 1888. Babbage apparently once said that he had often been asked ‘if you put into the machine wrong figures, will the right answers come out?’ Accurate information is the next hurdle in getting insight.
Yet, one particular analytics company now advertises, ‘Just ask your data. The future of analytics starts now’. The company goes on to explain that there is an entirely new way to interact with your data, which allows you to use ‘natural language to get insights directly from any data source. It’s really that easy.’ Is it? Understanding the data is often the final challenge in creating insight.
There’s no insight without action
My definition of insight is the gathering of information and extraction of potentially actionable strategies. The information might be from a trend, a difference between geographies, consumption variations, changes in costs, unexpected downtime, etc. However, it comes from looking at both the data and information, and completing the sentence: ‘The data/information shows…, which means that we could/should…’ (a worthwhile step when you next develop the often-misused SWOT analysis). The ‘art’ of picking these out is based upon looking for comparisons, differences, irregularities – accessing competitor knowledge, using open questions, looking at the market in the broadest sense. In the end, the information becomes insight only once you determine you can act on it!
Peter Drucker’s (1982) statement still holds true: ‘What a business needs the most for its decisions, especially strategic ones, are data about what goes on outside it. It is only outside the business that there are results, opportunities, and threats’. The recent decision to discontinue the Airbus A380 passenger jet is a case in point. The manufacturer and its investors overruled the market realities of a desire for direct, low-fare and frequent flights that only smaller aircraft can provide. In the end, you cannot force a global market to accept products or services. So did Airbus’ strategy became misaligned due to a lack of insight or its interpretation?
This leads us to the conclusion that there are three conundrums that only effort, capability and experience can solve: Are you (1) asking the right questions, (2) getting accurate data and (3) understanding the answers? Setting yourself up for success means getting these outlined before you start on the quest for insight. Good hunting!