05/05/2021

Strategists: Avoid the 'Siren Song' of the Averages

In fact, pay greater attention to the outliers

I am utterly tired of the modern strategy focus on averages, whether means, medians or modes. It is Achilles Heel of data analytics/Big Data/Artificial Intelligence. That is why I am dedicating my 31^st Playing to Win/Practitioner Insights (PTW/PI) to encouraging strategists to go beyond obsessing about averages.

The Modern Focus on Averages

In world of strategy, all analytical guns have long been trained on means, medians and modes. What is the most representative customer behavior? What is the biggest customer need? What is the average cost of our product? How do most people get information about our product? What is the average life of our customers? What is the biggest segment?

Data analytics just exacerbates this tendency. It generally involves compiling a big data set and then applying analytical techniques to look for patterns. What, generally speaking, constitutes a pattern? It tends to be lots of something: the middle of the distribution. What do most customers buy? Where do we make the most profit? Etc.

Please select this link to read the complete article from Towards Data Science.