The question that everyone working in analytics must answer is “How does this business make money?”
Why is the answer so important? Because if you don’t know how the business makes money, you can’t understand your contribution to the bottom line. You can’t add value if you don’t understand how value is created.
In analytics, the amount of context drives the amount of value created
Every chief data officer, head of analytics and, frankly, data analyst, must know how the business makes money.
The role of an analyst is to seriously investigate data, and to think critically about that investigation. If they don’t know how the business makes money, they can never know what impact their work has on the bottom line. And they won’t care if it doesn’t.
Every piece of analysis is an opportunity to uncover new insights about the business. But without the business model as context, an analyst will never uncover those opportunities.
Are your analysts empowered to ask “why are we doing this?”
It’s easy for analytics teams to become insular, or to stop questioning. Like most teams, they have a job to do, and focusing on daily operations can make it hard to consider the big picture. But if they don’t ask hard questions, they’re wasting everyone’s time.
One of the most valuable traits an analyst can have is the inclination to ask why? To push back on an organization, and say, why do you need this? Every analyst needs the commercial nous to be able to counter a request (or at least push to understand its relevance).
Most organizations tend to overload their analytics teams with requests that add little commercial value. A great analyst will ask: What is the commercial outcome of this work? How does this grow the business? What is the bigger opportunity here? Is this really the right question?
Are your analysts writing reports or driving organisational strategy?
If you were to ask most analysts what they do, they would tell you they “write reports” for the business. And that’s true, but it’s a limited view.
In contrast, I met an analyst recently who described their role as “driving organizational strategy.” That’s someone who clearly understands the impact of their analysis on the wider business.
This is the opportunity presented to the data analyst. It’s a “wow” opportunity – a real chance to influence how a business makes money.
An analyst who understands this about their role is empowered to drive substantial change, even at a very junior level. When I was working as a data analyst at NAB, what I loved about my job was being able to see the material impact my work was having across the business. For a 20-something analyst, it was incredible to feel like I was driving meaningful change.
Data analysts have a unique chance to directly connect what they’re doing to the way the organisation does business. But this opportunity disappears if there’s no real understanding of how the business makes money. Because fundamentally, you can’t add value if you don’t understand how value is created.