Unlocking the Big Promise of Big Data

Rotman Management Magazine - Fall 2013

If the questions and challenges around big data can be dealt with effffffectively, the opportunities ahead are extraordinary.

by Anita McGahan

‘BIG DATA’ IS EVERYWHERE. Organizations of all types — large companies,

entrepreneurial startups, governmental agencies and

NGOs — have been encouraged to embrace the detailed, micro level

data generated by digital devices to become more efficient.

Indeed, the potential of big data to improve organizational productivity

Is significant, but that is only the tip of the iceberg.

In this article, I will argue that the most important opportunities

arising from big data lie in addressing problems such as

climate change, the fragility of our financial system, epidemic

disease, widespread corruption, disenfranchisement of the poor,

and the depletion of cheaply-extractable minerals, to name just

a few of the most important problems of our time. In short: the

‘big promise’ of big data lies in making headway against the most

significant management problems of our century.

The Need For a Big Data Strategy

What is big data? The prevailing definition is that a dataset is ‘big’

if it is too large to handle with widely available, conventional software

programs such as Excel, and thus requires specialized analytics.

Big data typically arises from digital devices, such as cellphones,

GPS systems and terminals on the Internet. Examples

include ‘information on every address that a particular taxicab

in NYC traveled to over the past year’; ‘the number of minutes

that individual users spent considering a stock beforemaking an

online purchase’; ‘the bacterial characteristics of beachwater according

to daily tests’; and ‘the identities of the purchasers of bus

tickets from remote rural communities into Mumbai’.

Analysts frequently point out that big data raises as many

questions as it answers: does the available micro-behavioral data

accurately represent the broader decision framework in the situation?

What questions can be accurately addressed by the data?

Who should control datasets and the insights that they generate?

Once a decision is made, how should an organization respond?

There is no shortcut through the challenges of organizational

change based on insights generated from big data. All of these issues

suggest that executives will be well-served by developing a

big-data strategy rather than by reacting opportunistically to the

analyses made possible as it is uncovered.

Strategy is also essential for unlocking solutions enabled by

big data to the most important social problems of our time. Problems

such as climate change, financial instability and epidemic

disease are intractable because they are involved with and are

at least partly remediated by large public systems that cannot be

abandoned — or even put at risk of outage. For example, public

utilities and infrastructure simply cannot support experimentation

that puts their core operation at risk. Thus, the importance

of strategy here is even greater than it is for private corporations

that can tolerate experimentation in the core.

Leaders who seek to unleash the power of big data in the

interests of addressing the most important problems of our time

need a strategy for triaging analytical opportunities, anticipating

the innovations that the analysis will compel, and for overcoming

resistance to change in the face of legitimate claims that current

systems cannot be abandoned without a seamless and responsible

transition to new ways of doing things.

Any strategy for tackling the most important problems of

our time also has to deal with the complexities of implementation

over governmental agencies, private actors and the public.

In short, big data carries the potential to inspire and create new

resources, decision tools, communication vehicles, and coordinating

devices; but realizing their value requires doubling down

on thinking through the implications for a safe, equitable, innovative,

responsible and peaceable transition to new ways of governing

public resources.

Big-Data Tools for Creating Public Value

The first step in an effective big-data strategy involves identifying

analytical tools for creating information that can enable innovative

solutions to public problems. Figure One contains eight

examples of tools that are already in use. Many of these tools are

interrelated, and the list is far from comprehensive. Yet a brief

review of the public processes that have been addressed through

these tools reveals two important sets of issues that must be

addressed for a big-data strategy to be effective: classical challenges

that have long been elements of public processes, such

as accounting for absent voices in public dialogue; and antecedent

challenges that are specifically tied to the use of big-data

tools. Let’s look more closely at each in turn.

CROWDSOURCING. In 2001, a television show called ‘Who Wants to

be a Millionaire’ hosted by Regis Philbin took over the airways

in North America. The show required its contestants to answer

a number of multiple-choice questions successfully. One tool

available to each contestant was to ask the audience for advice

— effectively ‘crowdsourcing’ the answer to the multiple-choice

question at hand (the game allowed a contestant only one instance

of use of this opportunity per game). Despite the specificity

or technicality of the question, the audience almost invariably

produced the right answer.

Crowdsourcing in the public domain typically involves engaging

the public through the Web in a discussion of a potential

problem and its solutions. When crowdsourcing works, it can

cultivate a diversity of potential solutions to a well-defined

problem, such as how to reduce rush-hour traffic on a particular

roadway. A classical challenge in this situation is in accounting

for absent voices. For example, suppose a promising crowdsourced

suggestion for resolving the traffic problem involves diverting

heavy trucks onto an access road. A classical challenge

for a decision maker in this situation involves accounting for

the fact that the majority typically will not consider the property

rights of a minority of people living on the new route who will

be adversely affected by it. But big data also raises another set of

issues around fairly and responsibly considering and responding

to the full range of legitimate alternative routes, as well as other

possible solutions, such as implementing a congestion charge

or restricting truck use to low-density times of day. In other

words, crowdsourcing compels not only a rigorous concern for

old problems, it also creates new ones.

WEB INTERFACES FOR CITIZEN ENGAGEMENT. Over the past 20

years, many small towns around the world have established

websites that invite citizens to offer feedback to local authorities,

and engage in dialogue about local problems. In

some communities, this web-enabled dialogue has deepened

discussion by enabling the development of important

facts that inform questions about the operation of schools,

for example. One classical challenge that such a dialogue creates

is the disenfranchisement of actors that may be critical

in the response to such suggestions, such as an elementary

school’s faculty and staff. Many town managers now regularly

meet at conferences in which they share tips, tactics and

strategies for avoiding such disenfranchisement. Yet the enablement

of web-based tools also creates another problem:

the potential for framing and advancing dialogue on issues

that are not well-defined, widely concerning, or actionable

under localized decision structures. When web feedback loses

focus and becomes diffuse, it can generate as many frustrations

as advances.

OPEN INNOVATION PLATFORMS AND GRAND CHALLENGES. In a single

generation, the Gates Foundation and its partners have

advanced science on the health challenges of the poor through

a program of ‘Grand Challenges.’ These programs establish laddered

goals for solving a previously-intractable problem, and

thus decompose problems to break resource constraints. ‘Open

innovation platforms’ similarly allow scientists to collaborate

more effectively by providing a single place where ‘half-baked’ solutions

and partial advances are accessible across the community.

What kinds of challenges tend to arise in the implementation

of grand challenges and open-innovation programs? A

long-standing issue is in overcoming the private incentives of

scientists to keep their work private — a challenge that the Gates

Foundation has addressed by offering large research grants

to scientists willing to share their work. The grand-challenges

process has also exposed idiosyncratic and antecedent

management problems that have required a carefully developed,

strategic response. Primary among them is the failure even

in the achievement of intermediate goals, such as plagued

scientists committed to the development of an HIV vaccine.

Even out-of-the-box successes may create unanticipated demands

on important actors, such as local physicians, who must

be engaged to deliver novel medicines once they are developed.

ONLINE TOWN HALLS AND OPEN-GOVERNMENT BLOGS. Some elected

and appointed leaders have gone beyond enabling inbound Web

tools and turned to online town halls and blogs as mechanisms

for enhancing transparency in their decision processes. For example,

U.S. President Barack Obama conducted the first ‘live

tweet’ online town hall meeting in May, 2009, in which he invited

questions from American citizens. What is the advantage of such

an approach? Obama explained his priority as “open, transparent

governance.” By inviting dialogue, public leaders may become

more inclusive and transparent in their decision processes.

A classical challenge: fighting shallowness, maintaining focus,

and preventing the town hall from degenerating into a firestorm

of disconnected complaining. By enabling town halls online, the

scale on expectations for transparency may be unprecedented.

To make good on his promise of transparency, Obama had to

maintain coherency by defining specific subjects and decision

priorities as the topics of online discussion.

SOCIAL MEDIA. Three days after the 2013 Boston Marathon bombing,

the Federal Bureau of Investigation, in collaboration with

the City of Boston and the Commonwealth of Massachusetts,

released grainy pictures of two suspects and asked the public

for help in identification. Within seconds, users of social media

such as Facebook and Twitter had identified the figures as

Tamerlan and Dzhokhar Tsarnaev. In subsequent days and

weeks, the FBI used the social-media accounts of the suspects

to construct theories of the motives, mechanisms, and potential

collaborators behind the crimes.

In general, the big data embedded in social media constitute

an extraordinary stockpile of potential information about relationships,

viewpoints and personal activities. For leaders interested

in developing public policies, analyzing these media may

yield understanding of how important stakeholders will react to

alternative approaches. By anticipating these reactions, leaders

can more effectively craft policy in the first place. A classical challenge

involves negotiating among the interests of various stakeholders,

and subsequently managing the expectations of those

whose interests are compromised. An antecedent challenge to

big data itself: responding to the feedback that social media generates,

and staying the course on a singular, integrated and coherent

plan of action.

CALLS TO ACTION. Change.org distributes petitions for social

change. Sign up, click a few boxes to indicate your interests, and

you get daily or weekly e-mails listing petitions to which you

can sign your name. The petitions are designed to lead to specific

action, such as to compel a company to update its childcare

policies, lobby a county animal-rescue shelter not to euthanize

an animal, and to expose corruption in a regional office issuing

driver’s licenses in India. The big-data opportunities generated

by Change.org, which has the e-mail addresses of advocates

willing to put their names on petitions associated with particular

causes, include the potential to galvanize almost instantly advocacy

for a specific action by a public or private authority.

A big-data strategy on a complex issue such as, for example,

reducing corruption in the administration of driver’s licenses,

requires the careful vetting of the petitions posted by organizations

such as Change.org to validate their legitimacy and to assure

that their framing is sensitive to context. A classical issue

in advocacy is avoiding the dilution of public authority and responsibility

that may arise from a targeted intervention (for

example, corruption in the issuance of driver’s licenses may

become more subtle and entrenched in the wake of a single, targeted

intervention.)

The problem of countermanding the classical challenge

is complicated by a new issue antecedent to big data itself: embracing

variation in the emotional commitment of advocates to

particular causes. Change.org makes signing a petition so easy

that many signatories may not feel as strongly as others about the

causes they support. Triaging the level of advocacy for a step is

as important as the email addresses of the advocates.

REGISTRATION AND TRACKING OF RESOURCES. Many organizations —

including governmental agencies, NGOs and companies — sit

on stockpiles of data that could be transformed into valuable

information. Big data is commercially valuable, but assessing

its value is complicated. The first step lies in understanding

the stockpile as well as the organization’s capacity for analysis

and for commercialization of data.

Accurately accounting even for tangible assets is a significant

challenge in many organizations, especially governmental

agencies, and the challenge is compounded when the assets

are intangible: big data may have a short half-life (the value of

information on last year’s fashion trends fades quickly), be unexpectedly

important (information on the efficacy of a vaccine escalates

in value when an epidemic breaks out), and contain ‘needles

in haystacks’ (such as the identities of the Tsarnaev brothers).

Leaders who seek to use big data for change have to find ways

to avoid pouring analytical resources into fading opportunities

while standing ready to act fast to deploy analytics when the

value of big data is evident.

QUANTIFICATION OF MILESTONES AND TRACKING PROGRESS ON PUBLIC

GOALS. The City of Newark, New Jersey, thrives on big data. Charismatic

Mayor Cory Booker is a tireless tweeter — responding

personally to countless citizen queries, claims, and complaints.

Yet the Booker administration has moved well beyond using digital

technology for communication into a strategy of quantifying

milestones and tracking progress on public goals. The City’s website

contains a data-rich report called Newark 2.0 on the City’s

progress on goals such as preventing missed sanitation pickups,

reductions in aggravated assaults, population growth, and newbusiness

formation.

A long-standing challenge in the reporting of figures such

as Newark’s is in their sensitivity and accuracy: for example,

one way to get criminality statistics down in any city is to reduce

arrests rather than the underlying crime; and the resilience and

robustness of new businesses is as important as their formation.

In its reporting, Newark triangulates on measures to address

these challenges. Even more impressive, however, is Booker’s

ability to manage against the temptation that arises from big

data to look at every issue in quantitative terms: by visiting new

businesses, meeting with police officers, and staying close to his

constituents, Booker works to complement the insights that big

data offers with the subtle understanding that only qualitative

interventions can deliver.

In closing

Big data tools carry unprecedented promise, but they also create

a slew of challenges that must be confronted for a strategy to be

effective. The examples discussed herein illustrate some of the

core issues, which include:

·       defending against analytical overload;

·       finding kernels of value;

·       making insights actionable;

·       meeting the expectations of contributors;

·       managing the emotional overload that arises from expression;

·       and protecting privacy.

Big data also raises some fundamental questions of governance:

who owns information extracted from data about your behaviour,

attitudes and relationships? And who decides what can be done

with that information?

If these questions can be answered effectively, the opportunities

ahead are extraordinary, because buried in this data is information

on how to inspire, create, and communicate effectively

to compel massive action against the most important challenges

of our time.

By embracing big data, organizations of all types can re-invigorate

their approaches to value creation by investing to understand

how to satisfy customers efficiently as well as create jobs

that employees love. Public leaders can use big data to understand

and reinforce the vibrancy of local communities; reformers

and advocates can compel conservation, root out corruption,

and advance civil rights; and law-enforcement agents can use big

data to understand disenfranchisement and disaffectation and

thus prevent tragedy. In short, big data makes possible change at

the scale of our most important public problems.

         

 

Anita McGahan is Associate Dean (Research), the Rotman

Chair in Management, Director of the PhD Program and

Professor of Strategic Management at the Rotman School

of Management, with a cross-appointment to the University

of Toronto’s Munk School of Global Affairs. Rotman faculty

research is ranked in the top ten worldwide by the Financial Times.