Jeremy Bird served as the National Deputy Director for Organizing for America (the Obama campaign in abeyance) and he described the work of analyst Dan Wagner: “It’s one thing to be right when you’re going to win; it’s another thing to be right when you’re going to lose.” It is yet another to be right five months before you’re going to lose.
Bird was referring to the uncanny prediction that Republican Scott Brown would win the Massachusetts Senate seat vacated by Ted Kennedy.
Dan Wagner, the Chief Analytics Officer for the Obama campaign is flat out brilliant. He is a combination of Bill gates and Batman. I am not gay, but I confess to having a crush on him. He should fill stadiums instead of Justin Bieber.
To get a view of how smart this guy is check out a fabulous article by Sasha Issenberg in the January/February edition of MIT Technology Review. Here is the link.
Don’t get your knickers all twisted because the story is about politics and Obama. I can hear some of you now, “Obama? I am a deep red Republican and I don’t need anything from that socialist cabal in DC!” Trust me, if you are a Republican you are especially required to read on. It is true the work Wagner did with his team was set on a political stage—but the intellectual and statistical breakthroughs he achieved are incredibly relevant to anyone in business—even very small businesses. In my opinion the story told in the article above is the most important story of the decade for anyone interested in strategic planning, leadership, and business success.
So what’s all the fuss? At the heart of Brown’s brilliance is the problem of connecting different databases together in a way that makes sense. For example, if we wanted to calculate the “net profitability” of a Wal Mart store we could put together a spreadsheet that measures sales and expenses and the like. But the potential of “big data” is that we could also consider external factors like traffic patterns, weather, housing sales and so forth. The fancy term for this is “Structural Equation Modeling.” I took the class in graduate school and barely survived. It is deep stuff. I don’t understand the math, but I can clearly see the potential of this approach.
“Big Data” is the new buzz term for connecting disparate data bases and creating alignment that reveals a much richer and more accurate views of our world than the results we get with traditional accounting or demographic data. Up until the Dan Wagner Big Data Revolution (I think that should the name of his band) lots of people were experimenting with big data solutions: banks, credit card companies, hospitals, the military, insurance companies, and entertainment companies have spent tens of millions of dollars trying create more accurate models of what is happening—and why it is happening so that they can make more accurate predictions.
Dan Wagner’s predictions were scary good. In the olden days we would have accused him of sorcery. For example, the percentage of votes cast for Obama by early voters in highly contested Hamilton County Ohio was 57.16%. Wagner’s prediction was 57.68%. The article sites dozens of other examples of how Wagner completely tamed the beast called big data and had it operating with incredible precision in the campaign.
But if you think this is an article about math and statistics and nerds…you’re only half right. The double back flip amazing thing about Wagner’s methodology is that it is rooted in actual human behavior. He intentionally rejected the idea that demographic data points would allow you to lump a person into a category; instead they used data to try and understand and persuade individual people. This “real people” issue is huge. It has been the center of thinking for 1:1 marketing (See Peppers and Rogers); Customer Relationship Management (CRM) and most recently Net Promoter measures.
Wagner must believe that people are smart and important. He trusted the basic idea that people read news and react to what they see and hear. And it was that ongoing dialogue that he was able to listen to, learn from, and eventually influence.
There is a good chance that there are people in your community—maybe even in your organization who have Wagner’s capabilities. It is time for you to find those people and listen to them. They will have advanced degrees in sociology, communication science, statistics, or political science. They will be savvy about the use of off the shelf computer tools and they will know how to leverage existing data sets. But the most important thing they will be able to do is comprehend and inform strategy. They will want to understand the values of your business and the goals you are trying to achieve. It will not be about “more sales” it will have to be about making a difference in people’s lives.
If you find these people, you will have to learn too. You will have to listen carefully and you will have to articulate the often unspoken assumptions about what is really going on in your business. You will have to accept that the only way to be successful in business in the 21st century is by being in dialogue with your customers.
You must let go of the idea that you can second guess what they want or need and zap them with a clever mass media message. You will have to take an ax to the silos that separate marketing, operations, IT, and strategic planning. It is about having an awesome, high performance team that can harness the stunning power of modern computation—in ways that are relevant right now to the business and the people you serve.
Big data is the base of the pyramid. It needs to operate in a way that gives you confidence that you are engaged with your key partners and customers—and the rest of the world. It is your connection to reality. The next level up is mission, vision, values, and ends guidance (typically the domain of your Board of Directors). Without clarity in these values you cannot mount a strategy. Then the top of the pyramid is the actual strategic moves you will make to optimize your influence in the market—to achieve your mission.
I assure you Dan Wagner changed the world. He cracked the code. He upended the old school linear data models that trapped us in worthless and often insulting generalizations about people. Issenberg says it best, “…(He) reduced every American to a series of numbers. Yet those numbers somehow captured the individuality of each voter, and they were not demographic classifications. The scores measured the ability of people to change politics—and be changed by it.”