Good Day to all!
Recently I have heard more and more talk in the business world of the concept of first principles thinking. Elon Musk has been quite vocal about it, and as his star continues rising, and people are taking more notice into the methods to his madness, it has become something I have heard around the water cooler so to speak.
This is not a new concept, in fact it is one of the oldest in philosophical thought (Thank you to my lovely wife for helping me get a grasp on the history of this) and in classical circles has been more commonly referred to as Aristotelian Process, standing in stark contrast to Socratic thought which has existed for around the same amount of time.
Although Socratic thought is a common element in clinical psychology, and Socratic methods are a leading component of academia, there is something truly wonderful about Aristotelian methods, and there are advantages in using first principle methods in developing and delivering business intelligence.
With that minor digression complete, let us take a moment to talk about how we apply what we know, what we have learned, and understand how it is we measure, define, predict and otherwise provide intelligence for business.
Developing our mini-marts, and the business should primarily lead our Minimally Viable Products that are delivered to the business users in developing the scope, scale, and content of intelligence that we deliver. What happens then when we have to build a proof of concept? Do we just throw random numbers up on a dashboard and hope that we are on the right track? I would argue this is where we apply some element of first principle thinking.
Every single business in the history of business, and existence today is nearly entirely focussed on one primary goal. Make money. That is it. Some people want to change the world, looking at you, Mr. Musk, and some people have businesses that are designed solely to break even. They all, though, have the commonality that money comes in, money goes out, and the goal is to have more of the former than the latter. This means that no matter how you look at things within any business, whether it is public sector, private sector, healthcare, education, sales, manufacturing, shipping, retail, service, hospitality, or any other we can make the very safe assumption that the movement and management of money will be important. If it is a department within a larger organization, it will remain the same; money will be the ultimate tip of the balance in the decision-making process.
As we are in the business of decision support, that means, we need to ensure that we look at the money, as the questions about the money, and find out how our users are interacting with their money. Ultimately, it is very hard to go wrong with delivering a proof of concept that looks at gross revenue and breaks it down by department, division, location, what have you.
Money doesn’t materialize from thin air though (Unless you are in financial management) however the adage that time is money has a lot of truth to it. Most, if not all businesses, rely on the trading of time as a resource toward the making of money. The time that people invest in producing, manufacturing, selling, shipping, delivering services, or just waiting (Looking at financial management again). This means we can, again, make a very safe assumption that the measurement of time is going to be important to the business, regardless of what business it is. I am not referring to the dimensional split of time into a period of reporting, but rather the measurement or fact of time passing. This can be cycle times, time to complete, manufacturing time, time to fill positions, time of training, transition times, client contact delays, constituent engagement times, etc. Regardless of the exact context, time will be an important factor in determining the success of the business, and as such, will be something important to deliver in reporting.
Time, though, is also the bridge between what the business does, and what the business makes in revenue; this is the reason why the last thing we need to focus on in this triad of business intelligence delivery is volume. This doesn’t mean the relative audio level of business (Looking at Matthew), but rather the amount of something the business does. This is easy in sales, manufacturing, retail, but sometimes can get a bit muddy in more service-oriented businesses and departments. Let me assure you, the volume, or amount of time a service is completed, delivered, fulfilled, or otherwise remains a measurable and important facet in these businesses too. To find the thing that the business does, which I would hope you have a firm grasp on if you are working within it, and describe the volume of that thing. The number of interaction with customers, the number of sales, the number of widgets produced and shipped. There will always be an easy win by delivering a measure of the volume of business the business does.
Everything else in developing KPIs, Metrics, Measures, Decision supports, and all manner of analytics will ultimately be delivering a measure of either money, time, or volume, or more likely a combination of these things. If you are new to interacting with a business, a department, or an industry, just remember, that business can be as complex and multi-faceted as the people that make it up, but it will only ever really measure these three things. Find them in your data, earmark them, understand them, and then everything past that becomes considerably easier in the long run.
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