Business Experiments

This afternoon I’m returning to Columbia Business School to speak to the Economics of Organizational Strategy class about business analytics in the HR space. I’m excited to be back at my alma mater to talk about my work. For this class, the professor assigned The Discipline of Business Experimentation from the Harvard Business Review. From the summary:

The data you already have can’t tell you how customers will react to innovations. To discover if a truly novel concept will succeed, you must subject it to a rigorous experiment. In most companies, tests do not adhere to scientific and statistical principles. As a result, managers often end up interpreting statistical noise as causation—and making bad decisions.

YES. All the buzz about big data and analytics fails to mention that if you are not testing correctly, your data may be driving you to make bad decisions! With businesses ramping up analytics capabilities in a big way, I think this happens much, much more than companies are willing to admit.

The example in the HBR article is about Cracker Barrel testing a switch from incandescent to LED lighting at its restaurants. At restaurants that installed the LED lights, traffic decreased. This would initially suggest that LEDs are bad for business. However, by digging deeper, executives realized that the LED lighting made the entrances look dimmer and customers turned away thinking the restaurant was closed. The LED lighting should have been brighter than the incandescent lighting, but individual store managers were going around the corporate lighting standards to install more incandescent lighting, thus making the store look brighter and more welcoming. Therefore, once these stores adhered to the new LED policy, they had fewer lights and were less luminous.

With all the attention around the tools and methods available with statistical analysis, I’m afraid this deeper digging may get short shrift.

It’s important that business professional not only dedicate more time to digging than analysis, but that we can speak the language of data and statistics. With so much more data available to businesses today, knowing how to use it for decision-making is a competitive advantage.

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Magic Bands and A Great Big Beautiful Tomorrow

I’m fresh off what was probably my 20th+ family trip to Walt Disney World, and as always it was such a magical time. After so many visits, it’s fun to experience the parks with a first-timer. and this time it was my sister’s boyfriend, Frank.

The Carousel of Progress sparked a great lunchtime discussion about what technology will look like at the end of this century. The Carousel of Progress is an animatronic stage show that shows an American family at four points in the 20th century, highlighting technology innovations in the home. It kicks off at the turn of the century, showing electric lights and cast iron stoves, and the “future” scene takes places in the 1990s, highlighting virtual reality games, self-flushing toilets and voice-activated appliances. After the ride, we all dreamed up what a 2000s Carousel of Progress would contain. Here in 2016 we’d be the very first scene of the show. 

First day in the Magic Kingdom, Feb. 2016. Em, Frank, me.
 We didn’t have to stretch too far to imagine what that scene would contain – we were wearing it. Disney World has integrated wearable technology into its parks with the Magic Bands. We all had a Magic Band in a chosen color with our name printed on the inside and used it as our hotel key, our park ticket, our credit card… It was everything. Meanwhile, all my ride photos popped up immediately in my Disney mobile app, presumably linked through my Magic Band.

Working in analytics, I am curious about the other side of the Band – the big data side. I would love to get a glimpse at what the data scientists at Disney are conjuring up with all the movement and spending data they get through the Magic Bands. Disney has spent over $1 billion on the MyMagic+ program so it’s clear they have big plans for ROI. So far reception has been positive, and the overall creepy factor I felt when my face first magically appeared on my Disney app – screaming on the new Seven Dwarves Mine attraction – was quickly replaced by joy when watching the two-minute video of my family’s reactions at various points on the new ride. From Wired:

No matter how often we say we’re creeped out by technology, we tend to acclimate quickly if it delivers what we want before we want it.

Just like the Carousel of Progress, technological innovation moves fast, and even now Magic Bands are moving to the past. The next scene takes place in Shanghai Disney, where everything will happen seamlessly through a smartphone. I’m adding Shanghai Disney to the bucket list!