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Summary:

It is fashionable these days to either like big data or just malign big data. Regardless of what your personal feelings are, the question has always been and will always be – what is data good for. Here are three stories to illustrate those questions.

Data has been a subject of my deliberations, both public and private, for a long time — almost a decade. Long before the bulge bracket consultants discovered its virtue and long before short-term trumpeters of data showed up, data was something that helped shape my thinking and approach to decision making. It was not big data, or smart data, or little data or panda data. It was just data, and what one could do with, it that influenced my thinking.

With more network end-points and more digitization, it goes without saying that the amount of data in our lives and at work is only going to increase. But the size of the data isn’t the issue; instead, it’s “what you do with the data” that will be the key to the success in the emerging future economy. The companies (and individuals) who don’t think accordingly will find themselves on the losing side. Let me tell you three personal stories that will illustrate my point.

Getty Images

Getty Images

Grounded

The first story involves an airline — Lufthansa, the German giant. I recently visited my parents in Delhi and a day before I returned I fell sick. I was quite feverish and somewhat of a pain to my fellow travelers. I developed a nasty cough and, well, I thought it might be a good idea to buy an upgrade and go to sleep on a lengthy (22-hour) flight. Instead of trying to use my points  — I know better — I offered to buy an upgrade. But a Lufthansa official declined to sell me the upgrade. It was not that there weren’t any empty seats — there were many. But since I had an unchangeable ticket, he refused. It was mildly irritating because I had been patronizing Lufthansa for nearly two decades and was hoping for a little compassion.

That episode made me wonder about why Lufthansa was so rigid and refused to use historical data they had on me to make a smart decision to appease a returning customer, especially since it allowed them to monetize empty seats. The inflexible policies basically lead the airline to leave money on the table.

In the age of big data and smart enterprises, how can a company not have a way to make smarter, real-time business decisions? I wonder if “out data-ing” will be the right way for a competitor to eat the German carrier for lunch. This lack of ability to not know the customer is going to be what I believe we will mean when we say “big, dumb company.”

I, for one would like my airline to know me, know my tastes and if possible have enough data on me to offer me a quasi-personalized experience. Yes, I do live in the future and sometimes get carried away about the possibilities of data, sensors and the notion hyper-personalization. But still, I am not talking mining on the moon — I am talking about tactics little companies like Uber are using in making smart customer decisions.

Disconnected

The second story involves a wireless company — Verizon Wireless. Every time I leave the country, I call them up and sign up for the traveling data plan, letting them know where I am traveling and for how long. I actually don’t mind doing that because it makes a life a lot easier when I land in a new country. A week later when I return, I get ominous-sounding SMS alerts followed by a phone call from one of their agents who in an alarmist tone asks me if I have my phone and what not. Most of these calls are at early hours of the day when I am trying to deal with jet lag.

I cannot figure out why the carrier cannot figure out — using location data it obviously has — that I am actually back in the United States and in my city and perhaps even in my own neighborhood. As a customer, it would certainly be more convenient. I mean, these guys are willing to sift through my location data and my phone calls to do targeted advertising, why can’t they reconcile my location with their other databases to automatically update the records?

Shoe Side Story

Now let me tell you another story about a little store in Manhattan. In sharp contrast to my Lufthansa experience, I was reminded that I had a great visit to a shoe store in New York on my last visit to the big city. It proved to be educational. I had about half an hour between meetings and I walked through Soho, where I spotted Varda.

The last time I was there it was about 10 years ago, a few weeks before I moved to San Francisco. I had bought a pair of boots at the store. I was surprised that the store had survived the test of time and it was still going strong (it had started in 1981). The fact that they made shoes that last forever might have something to do with it, I imagine.

As luck would have it, I was wearing the very same boots. They have given me excellent service and with the exception of being comfortable like old shoes can be, they are almost new. I decided to duck into the store — after all, I had a little bit of time. I saw that they had an identical pair to the one I was wearing, except they were made with suede of a different hue. And I am sucker for suede and boots.

The salesperson and I ended up in a conversation about shoes and when she swiped the credit card, she noticed that I had done business with the store previously on a couple of occasions. She gave me an instant discount — without me asking for it. It wasn’t a lot, but it was a nice feeling of being appreciated for my loyalty.

Data designs experiences

Big DataA small store like Varda created an experience that was all-encompassing and got my money. Lufthansa just alienated me, after twenty years of blindly buying from them. I don’t think there was any big data involved at the shoe store: the aging PC probably was pulling data off Excel or something similar. It was micro-data if there was any.

A few weeks ago, I wrote about how a brand experience is multitouch and multimodal. I don’t think large industrial-era dinosaurs like airlines such as Lufthansa and American Airlines quite understand that. And that is why it doesn’t matter how much data they have collected about their customers or how many millions of dollars they spend on their computing and data infrastructure. They don’t know one simple truth: it is not the data, it is what you do with it, stupid. 

Asking the right questions from the data and then creating an experience befitting customer happiness or drawing conclusions that are not obvious involves a level of humanity — something that is unfortunately missing from all the buzz about data. It is a pervasive problem across the industrial landscape.

As for me, I am shopping for a more-intelligent airline — one that values relationships and creates tailored experiences for me, the customer.

[Structure Data 2013: We will be discussing a lot about data and what you do with it at our upcoming Structure Data conference. For instance, we will have  Mohan Namboodiri, VP, Customer Analytics, Williams-Sonoma talk about how the lifestyle company uses data. The conference is being held on March 20 & 21 in New York. More details here.]

  1. personal impersonal data, a new tool in the evolution of humanity and how to do business — or interact — with one another. the use usually underscores the true philosophy of the person or business, as well as reveal the quality of their efforts to maximize a resource.

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  2. It’s all about point/dots bindings to create data. If you have inflexible systems, no amount of points/dots will help the company.
    The funny thing, while the AI folks are still trying to figure out if machines can learn true/truth. Some other folks are trying to figure out if machines can pass the mirror test, visual self-aware. While most companies just collect points for the sake of someday have big data.

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    1. Ronald

      I think the funny thing is all these rules are meant to make us think and do things in less human a manner. If we didn’t so that we probably will think in terms of asking the right questions.

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      1. People in big companies don’t know the rules anymore, they are programmed into a piece of SW 10 years old and impossible to bend.
        Rules are what binds the points into data as more the merrier, I think Jeff Jonas has an example of 10k rules by a fraud detection system.
        Anyway modern systems don’t have rules with fixed true/false or probability assigned, hence they can adapt to the needs of people in different situations. They don’t need to be recompiled to get rule number 10001 in, which contradicts rule 666. Or you fall outside the probability being a customer who wants to change an “unchangeable” ticket. Or it needs 1b records to learn that a customer who has called in to visit a foreign country and is back home on time didn’t loose his phone.
        How many calls has SIRI processed by now, how much better did it get?

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  3. Tom Foremski Tuesday, March 5, 2013

    Business succeeds on social intelligence and not incessant talk about big data. If a company has to hire Data Scientists it shows they have no clue as to what their business is doing or where it is selling. A business that is not a part of its communities will fall apart and disappear. Big data is not a solution for clueless management.

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    1. Well said Tom!

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  4. Hamza Shaban Tuesday, March 5, 2013

    Evgeny Morozov touched on these same themes writing about music discovery apps like Pandora. As Om points out, much of the hyperventilating over ‘big data’ ignores the need and value of the human touch. Collecting tremendous amounts of information to capture a God’s-eye-view of trends and affinities is exciting, but as with the example of the Varda show store, simple customer service goes a long way.

    Om, besides Uber do you have companies in mind that combine the promise of ‘big data’ with thoughtful, consumer facing services/practices? Opower comes to mind, as does Foursquare’s new direction.

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    1. Another company I would add to the list is actually netflix @hamza

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  5. Om,

    First off, a cracking article. Organisations should be able to use linked data as a way of improving your life – there is no doubt about that. However, as you consider the data of larger organisations you also get an increase in bureaucracy with regards to permissions which makes these types of data-driven interactions more difficult.

    There is no reason why a small, family run shoe store wouldn’t be able to give you a loyalty discount. When you start getting into big data, though, things are not so simple. You’d need to establish consent for your data to be shared at each touchpoint, and it’s also essential to establish this consent for, say, your phone company to take your location data and make judgement calls with regards to what is also probably a stringent security policy. This is bigger than corporates themselves and starts falling under the remit of government legislation. I don’t know where the US stands on things such as this, but certainly in the EU they are considering overhauling (or ‘updating’) our data laws which will make it harder for data bureaus like my own much harder to operate.

    It’s a lovely idea and in some cases, where the will to change is present and it is possible to tick all the bureaucratic boxes, there is some wonderful stuff going on out there; Amazon with their Kindle support is a prime example. However, if we are going to see more meaningful uses of big data I think there needs to be a shift in the perceptions of data and data use to help make these things possible.

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    1. @Aris

      What a great comment. Clearly something for me to ponder upon and I am going to be thinking about it for a while.

      That said, I think the case I am making for is common sense logic and being opportunistic and caring. I think the legal aspects are about a different level of complexity and as a result I have often wondered if we are scared of the “data” because we look at it from a whole different angle and not from the angle of using sense.

      Thoughts?

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      1. Om,

        Fear is definitely a big part of it. Tech savvy individuals like ourselves can see the benefit of offering up our data as this makes for a more convenient customer experience. However, in the grand scheme of things I think we are in the minority.

        There is a major perception of linked data being a bad thing, and it absolutely is when that data falls into the wrong hands. People are either worried of ‘Big Brother’ tracking their every move, and we’ve all heard horror stories of prospective employers turning down candidates because of Facebook data which should be private, but hey.

        If we do want to see a move towards convenience-driven data use, I don’t think it’s enough just to challenge the corporates who hold our data. I think the task ahead of us, if we are willing to take it on, in much, much broader in scope.

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        1. @aris

          Great comment. Thanks for sharing!

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  6. I had a very similar experience with Lufthansa on Christmas Eve of 2000, as I was escorting my very ill father back to the U.S. from Delhi to get a pacemaker.

    My father was in my business-class seat in a virtually empty cabin; I took his economy seat.

    The stewardess had seen me helping him, unsteady on his feet, and my checking on him every so often.

    She was very gracious, and invited me to sit next to him for the balance of the long flight to Frankfurt., which I did.

    A short while later she was back, very embarrassed, to tell me that her supervisor was insisting that I be asked to go back to economy, because – get this – in the worst stereotype of Germany, he told her, “Rules are rules”!!!

    What a customer service debacle, on Christmas Eve, with an empty cabin, an ailing elderly passenger, and the revocation of a very gracious, unsolicited offer by a representative of the airline, the stewardess, for me to sit next to my Dad to watch over him.

    I have never flown Lufthansa since.

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    1. @Inder

      I don’t blame you and frankly this is precisely what is the problem with companies that don’t seem to understand that they live in a connected world and options are a lot easier to find than they used to be in the past.

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  7. Om – great article. RE: Lufthansa, there is another possibilty – what if they actually did use data, and in some bit of twisted airline logic – proactively decided against you? This *is* the airline industry with inscrutable pricing policies, you know. I’m sure there’s no correlation with almost none of them ever operating at a profit. :) -Tim

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    1. @brown_te,

      Now that you bring it up, well, I am guessing that could actually be true… I guess they knew I was going to bitch anyway. #joke.

      Thanks for the comment.

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  8. Perhaps the bigger big data equation is imputing the human experience in business related circumstances.
    Let’s review Inder’s Lufthansa experience. During the same trip, people and circumstances two separate but related employees react 180 degrees from one another. The first relationship was empathetic and allowed the rules to be bent, presumably in the belief that no one would object.
    The second participant (supervisor) revoked the decision on the “rules are rules” argument. I assume the one to many relationship experience was invoked. The supervisor must have internalized that other paying customers could complain if they observed preferential treatment at a lesser cost.
    Not long ago Wal-Mart released several employees that intervened and detained a shoplifter who happened to be armed.
    The alleged perpetrator was subdued and arrested.
    Later, Wal-Mart acted to release the employees because of a published employee handbook rule that stated employees should not take direct action to detain after observing criminal behavior. I posit that most outsiders reviewing the accounts of the situation would disagree with the application of the rule.
    I seem to be reinforcing what has already been suggested. No amount of data can produce interpreted results of fair, reasonable or just in human behavior. Just ask our politicians.

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  9. Jonathan Barouch Wednesday, March 6, 2013

    There will be significant benefit from data for businesses who are able to mash together disparate data sets to get unique insights or provide personalized services to consumers. We are already seeing companies who are matching payments data back to their CRM and linking these customers back to their social media profiles.

    Om: Imagine if once you had swiped your card at the shoe retailer that they had matched this back to your social profiles, seen that you had tweeted about your wife’s birthday and then asked if you would like to have a look at a gift for her (or maybe even throwing her social profile up on their POS to give you some suggestions of what she might like).

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  10. *slow clap

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