Are Marketing Analysts Homo Analysticus?

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I enjoy maturity and evolution models of all kinds, especially for business. There is a stages of maturity model for information technologies and others such as for management accounting practices. What I like about stages of maturity models is they provide confidence that regardless what stage one is at – low or high – there is a next step further up that can be attained in an evolutionary way.

In biology there is an evolution of humans that has in earlier stages Australopithecus, then Homo erectus, then Neanderthals, and our current stage Homo Sapiens. Examples of important changes are brain size, hand grip, and a larynx for speaking.

Homo Analysticus

Just to have some fun I will take the position that some marketing and sales statisticians and analysts are primitive Homo Analysticus. Just as with humankind there are overlap periods where primitive statisticians co-exist with more sophisticated ones with more capabilities and skills. This implies they have evolutionary steps in their future. A stereotype of a statistician is they are geeks with pen pocket protectors who rarely stray from their cubicle. These are the Homo Analysticus. In the evolutionary ladder they can become decision makers and executives. They can add value beyond just analyzing data to assisting their organization to gain insights and make better decisions.

I mentioned the brain as an important change in this evolutionary ladder. There has been excellent research about the brain by Daniel Kahneman, recipient of the Nobel Prize in Economic Sciences for his seminal work in psychology, that challenged the rational model of judgment and decision making. In his recently published book, Thinking, Fast and Slow, Kahneman explains the two systems that drive the way we think. System 1 is fast, intuitive, and emotional; System 2 is slower, more deliberative, and more logical. System 1 is largely unconscious and it makes snap judgments based upon our memory of similar events and our emotions. System 2 is painfully slow, and is the process by which we consciously check facts and think carefully and rationally.

An example that Kahneman illustrate System 1 and System 2 thinking is this. Suppose that a bat and ball together cost $1.10 and that the bat costs $1.00 more than the ball. How much does the ball cost? Many people, relying mainly on System 1 thinking, will quickly say $0.10, but the correct answer is five cents. Here are the equations:

Bat + Ball = $1.10
Bat ($1.05) – Ball ($.05) = $1.00

A problem Kahneman points out is that System 2 thinking (slow) is easily distracted and hard to engage and that System 1 thinking (fast) is wrong as often as it is right. System 1 thinking is easily swayed by our emotions. An example he cites include the analysis that professional golfers are more accurate when putting for par than they are for birdie regardless of distance. Another example of a controlled experiment observes that people buy more cans of soup in a grocery store when there is a sign on the display that says “Limit 12 per customer.”

How do analysts exhibit System 1 and System 2 thinking?

What caught my attention is that System 2 thinking, which is deliberate and logical, is easily distracted. In our busy day there is little time for solitude and deep thinking. An analysts’ day may be consumed with tasks crunching numbers to meet a deadline. There is little time to consider the quality and validity of the data they are relying on. You have heard the phrase “garbage-in, garbage out.” They may also subconsciously have a bias to support a pre-conception that their managers and users already believe in.

Why would analysts who appear to be genetically born to seek precision, accuracy and detail rely on creating and worse yet using flawed information or having a bias? My belief is System 1 thinking, which is quickly accepting that their analyzed information is perfectly correct is distracting the analysts from the deeper understanding of what they are doing. Higher forms of the analyst species possess more Systems 2 thinking by being deliberate and logical. They first carefully frame the problem or opportunity before diving into the data.

What kind of marketing and sales analysts – actually any analyst – in your organization are producing studies and reports for users to gain insights and make decisions? Are they Homo Analysticus? How far along the evolutionary continuum are they?

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