Avoiding Paralysis by Analysis

July 20, 2010 by

At OpenView Labs, our strategic consulting services often revolve around data collection and analysis, be it for a market segmentation exercise, or an influence marketing channel discovery process. We tend to collect a lot of primary and secondary research data points and then analyze them in many different ways to get to the answer.

While we constantly try to improve our data collection methods, leveraging both traditional primary research techniques, from in-person or over-the-phone interviews to online panels and surveys, we are also mindful of other repositories of data such as in the company’s CRM implementation or customer support back-end. And of course, we always augment these data points with more market-based data from our secondary research efforts, mostly using the various online research tools that I have had a chance to write about before.

Now, the abundance of data can be an impediment to a successful analysis, especially when additional data is easily acquired at little cost. You might think it is very counter-intuitive, but our experience with similar projects is that with more access to data team members tend to shy away from making conclusions. Instead they rely on the easiest trope: ”Let’s table this for now and get more data”. It is always easier to collect some data, do some analysis and then throw everything together in a couple of slides that explain the results. However, it is much harder to go to the next level, where these results become the inputs into a rigorous decision making process. Moreover, ‘analyses’ tend to be mostly objective and can be delivered in a “neutral” way. Insights that lead to an actual decision being made are much more subjective and have to be delivered in a forceful way, and that is why it is much harder to come to a conclusion and express it post the analyses.

Market Segmentation is a typical area where this situation might arise. As the selection of the target segment ultimately affects business growth strategy, including sales and marketing strategy, companies might be reluctant to come to the final conclusion as that invariably prioritizes some segment over others and forces the company to make the required changes. Instead, more time is spent on figuring out more about the segment, more data is collected and more analysis done, because those sub projects help delay the final decision.

To avoid “paralysis by analysis”, we have a few tips picked up as we worked with our various expansion stage portfolio companies as part of our strategic consulting services.

- Define very clearly the analyses to be done and how a conclusion should be made.
- Instead of focusing on making sure that analyses are done right, we should focus on the
ultimate business value of the project and prioritize accordingly.
- Bring in outside experts at crucial points in the project — this will help resolve the bottlenecks in analysis development and analysis execution.
- Know how to walk away — since data is relatively easy to get, it is always tempting to keep doing it without going to some final conclusion.