Dan's book is making the news

Here is a link to a NYT article about Predictably Irrational. Fuqua is doing something very smart. While Dan is on his book tour, they are scheduling Alumni and recruiting events around his schedule. I went to one of the talks. If you have a chance to hear him talk about his research, you should go. The research on deception is fascinating...

Visualize!

Here is a chart created by the New York Times staff showing box office receipts over time for every movie release in 2007. It is a neat chart showing how "bursty" blockbusters are and how Oscar contenders have a longer tail. Neat, but you have to work for that insight. Some kind of filitering or making the horizontal access not from the calendar date but on weeks of distribution, would have made the point clearer. People go gaga for this stuff, but the nice presentation obscures the insight that you want to confer.

How should you manage your relationships with recruiters?

As the old joke says, carefully.

I get calls from recruiters at a fairly constant rate and have 3 principles that I use when talking with them. Note that most of the folks I speak with are retained search recruiters, they are paid, in advance, to fill a position. Companies tend to use retained search firms for more senior jobs and the search firm has an exclusive arrangement with the firm. I occasionally get a call from a contingency search firm. These firms are paid when they fill a job and are not exclusive. Most of what I am going to say is applicable to retained search folks who have a more relationship based business. Contingency folks are more transactional, so relationship building may not be as critical. Even still, making friends is always worthwhile. On to the principles.

First, always take the call. I speak with every recruiter that calls, even if they are recruiting for a position that I am not appropriate for. Someone gave me the advice that you should cultivate a recruiter network. It was good advice. In order to build that network, you actually need to speak to them. So, even if I am not right for the position, I chat with the recruiter. Often, especially for analytic jobs, they don't know the space, help them understand the job rec (truly!) or refer them to someone else. I always try to make the calls a positive experience for both of us. Even if we just chat about raising kids.

Second, if you are not interested in a job really try to pass on a referral. I almost always pass on a name. This means that I need to spend a couple of minutes looking through my contacts and see who might be appropriate for their job. One of my former direct reports is my go-to guy for referrals. If I am not interested in a job, he gets the referral. This helps him build his network and helps me deepen my relationship with the recruiter.

Third, be honest in your assessment of your interest level. If you are not the right person for the job or the job is too small, tell the recruiter. Don't try to get the interview for the practice. You'll mess up your relationship with the recruiter. Having said that, I have let a recruiter talk me into interviewing at a company, even though the scope was too small. The company agreed and then built a job around my skills. I wound up not taking the job, but I was up front about my concerns and they decided to proceed with the process, anyway.

I consider my recruiter network a real asset. Every job offer I received (I had 3) was through a recruiter. A good recruiter network will make your job search much easier.

At least this time she did not hit me

Different kind of post. I noticed that all of the big bloggers are name droppers. Here is my most recent brush with greatness.

I ran into Barabra Minto a couple of weeks ago. She wrote the Pyramid Principle that I recommend on the right side of the page. I met her once before, at a McKinsey Alumni event. She introduced herself by hitting me fairly hard in the arm and calling me a jerk. She thought I looked like Ricky Gervaise from the British version of The Office; Since he plays the role of a jerk, she thought it would be funny to inflict some pain on him/me. As I said to her, before you hit someone, you might want to make sure they are who you think they are. We got it all straightened out and had a laugh. Fast forward 2 years. I saw her again at a McKinsey event and re-introduced myself, related the story, etc. When I got to the looking like Ricky part of the story she said "You do look like him." At least she is consistent.

Moving bubble charts

While I am doing analysis, I don't worry too much about visualization. I am very hypothesis driven and data visualization is a great compliment to a more exploratory approach. Having said that, I do give a lot of thought to how I present the data to others. I don't think I have ever used animation, but after watching this video, I may need to expand my horizons. You can play with the Trendalyzer shown in the video here.
Report Portal has a moving bubble chart type that you can use with your own data. Very neat. Thanks to Jonathan Salkoff for turning me on to Trendalyzer.

Predicatably Irrational

My friend, Dan, just wrote a book called Predictably Irrational. Dan is a Behavioral Economist and is the person I know who is most likely to win a Nobel Prize. Fascinating guy. How interesting? Check out this interview of him talking about his new book. Here is the link to the book. Predictably Irrational

Skip level meetings

For part 2 of the Dafacto meeting series I present: Skip level meetings.

I love having regular skip level meetings. For those who have never heard of a skip level, the term refers to the direct reports of your direct reports. I try to hold a 1-1 meeting with each of my skips every 4-6 weeks. In my last organization, I had regular skip level meetings with about 9 people (all of my US folks. I did not hold regular skips with my overseas staff, though I met with almost all of them when I went to visit). Including the weekly 1-1’s with my direct reports, I typically had 7 hours of meetings with various staff members. Obviously, this was an enormous investment in time. Was it worthwhile? Absolutely. Otherwise you are dependent on your directs for information regarding things like staff morale, organizational issues, project progress, etc. I know staff found them valuable.

What did we talk about? Though the skip owned the meeting agenda (notice a theme), the skips were really focused on two things. First, staff development. I wanted to learn the staffs’ career and personal goals. We would use the time to talk about if they were making progress against those goals and what could I do to help.The time was very focused on their careers. In fact, after my first meeting, each person had to put together a development plan so we would have a structured conversation about their development.

Second, we talked about their projects. We talked about what was going well and what was not. People knew that I was fair and that if a project wasn’t going well, they would often tell me in those meetings. There were a couple of times where one of my directs was not living up to his commitment to his staff and the folks on his team needed a channel to be able to voice their concerns. Also, I would get to learn what was going well and use that information to give folks special recognition (I gave bottles of wine and gift cards) and visibility both in the team and to more senior executives.

One last thing. As a manager, it is very easy to move or cancel these meetings. After all, these folks are on your staff and are going to understand that stuff comes up. Right? As a leader, it is a terrible idea. If I had no choice, I would sometime postpone, knowing that this was sending a bad message to the staff member. I tried would make sure that they knew I did not want to cancel the meeting, and reschedule as soon as practical. The worst thing is blowing off the meetings. You wind up alienating the staff instead of helping them.

Staff Meetings

I am amazed at how many managers don't have staff meetings. Do they think they are not necessary? I think regular staff meetings are a critical management practice for, well, good management and leadership. And don't get me started on weekly meetings with direct reports or skip meetings. First things first. Staff meetings.

When I first started managing multiple groups, I found that I was repeating the same news over and over again. Also, some of the groups were working on complimentary projects or were interdependent and I was increasingly acting as the communication bridge between groups. So, I started to have staff meetings. I have always taken the same general approach to my staff meetings. First some general practices.

First, who owns the agenda and runs the meeting? Not me. Never me. Typically, one of my direct reports who I am starting to think about promoting. I want to give them the experience of running the meetings. They are going to need to do it themselves soon enough. Also, I don't see any reason to control the agenda. If I want to talk about something, I'll ask to have it on the agenda or just bring it up in the meeting.

Second, who attends? This depends on the organization and the needs. If you are often talking sharing confidential information, then a small, senior staff meeting is the way to go. If you want to use the meeting for sharing information across groups, then invite the senior folks and maybe their direct reports. I have seen people invite their directs on odd weeks and include the skip level folks on even weeks. I tend to go with inviting the larger group and make it clear that what is discussed does not go outside the family.

Third, how long? Between an hour and an hour and a half.

Typical agenda?

1. Company Updates. I use this time to talk any big company or departmental news that is relevant. Typically, this time was spent explaining why the company, my boss, or myself was doing something that did not seem to make sense to the staff. Some senior folks are pretty command and control. like to have a pretty tight reign on the discussions. I would rather use the time to share information.

2. Ken Rona updates. I give the team a sense of what I am working on. I do this so the staff can act as effective agents on my behalf and bring up any items that would materially affect my work. In this way, the people on the team can proactively participate in helping me solve my problems. Also, I really liked discussing my work in front of the team. Not only were folks helpful and pushed my thinking, it is good for morale. people like having the transparency.

3. Direct Reports update. My directs share their project lists. The agenda keeper is responsible for putting together an update project list for the group for every meeting. Mostly I focused these discussions on time lines. Are we going to meet this commitment we made. I think having to affirm the commitments in public, every week, keeps people focused.

4. Information sharing. We share interesting team outputs. I am a big fan of sharing information across silos. I often find that someone would do an analysis and share with the team, only to find that either there was a better way to do the analysis or that we could reuse the analysis for another internal client.

Oh, another tip. Have someone bring food. We did not use catering. We rotated this responsibility and reimbursed the cost of the food. It would have been easier (and more expensive) to have it catered, but I liked that people could bring their own style to the catering.

The Analytic Value Chain - Do the analysis

Finally! Lets do the analysis! Actually, I want to spend more time on what not to do.

I really did not expect to write much about how to select the analysis required to solve your problem (what!). I have assumed that you know the appropriate analysis to conduct to answer your original research question. In retrospect, maybe that isn't a great assumption, but here was my thinking: My posts are designed for managers of analytic teams and the folks that work on those teams who are still developing their managerial skills. Those people (I thought) should know the right analyses for a given situation.

Increasingly, I am questioning this assumption. I have found that analysts who are well trained in advanced analytic techniques and remember their training are not the rule; those who understand their business, and can creatively apply their training to a new business problem are rare. Maybe 30 percent of the statisticians I have worked with wholly qualify under my criteria (mostly at A fOrmer empLoyer. Hiring a director is what inspired me to write this thread. I will do a post on how to identify a high potential statistician). Most analysts are technicians and they have a hard time suggesting analyses for problems they have not seen before. This is not an indictment of statisticians, just applying statistical tools to business problems is hard. How hard? Let me illustrate.

Conducting an Ordinary Least Squares regression when you should be using a logistic regression is a common mistake. By using the simpler OLS analysis, you can get totally wrong conclusions, leading to incorrect decisions. I am talking about answers that may not even be directionally correct. So, it is important that you use Logit, even though it is more complicated, when the situation warrants (when the thing you want to predict is a yes or no). I won't hire someone who does not know when to use logit.

This mistake is so basic and no one using regression should make it. And it happens all the time. I know a company (none that I have ever worked for) that were using OLS when they needed to use Logit in a production environment, affecting hundreds of jobs for their clients a month. Did the statisticians who built the system know better? I don't know. I do know that the company has advanced statisticians working for them and who know better and are advocating for change. This is why you need the talented experts. They stop you from doing really dumb things.

As much as I would like to, I can't map out the correct analysis for any given business situation. Having said that, there are some common situations that I have come across over the last couple of years that you should watch out for.

Regression:
If you are using regression, you need to pay attention to the frequency distribution of the dependent variable. Unless the dependent variable is continuous, has a relatively large range, and is normally distributed, Ordinary Least Squares regression is not going to give you the right answer. You may need a more sophisticated analytic technique. Some rules of thumb: If you are using OLS on a binary variable (think yes or no) you are going to need a more sophisticated technique. Also, watch out if the dependant variable has a natural floor or ceiling. So, income is a good example. Very few people make less than zero dollars. So, zero is the floor. If you have an floor, then you may need to go with a Tobit. Depends on the distro of your dependant variable. If the dependant is normally distributed, then you are probably ok. If not, Tobit...

Impact of Seasonality/Time:
Most folks come up with some arithmatic technique to model seasonality. I hate this. You can never unpack the drivers of your dependant variable. Instead, you should use some kind of time series technique; e.g., ARIMA. ARIMA will let you figure out what the real drivers of behavior over time, as well as taking time into account.

Segmentation:
Check out the Kenny's one rule post on segmentation. The short version: For segmentation, don't try to do too much with one segmentation scheme. I think of segmentation like regression. You build a segmentation scheme for specific purposes.

Designing Experiments
In a direct marketing context, at least done correctly, testing is continous. I have had a number of occasions where the tests are not readable due to a business ownerer needing more volume and killing control groups or specific test cells when doing complicated designs.


Winding down
The big statistics software vendors have not yet developed bullet proof tools to help inexperienced analysts to do the appropriate analyses. My advice is to hire an analytics expert and teach them your business. Don't try (too hard) to find someone who is an expert in both analytics and your industry. Industry knowledge is much easier to teach than anaytic expertise. Doing the analysis is hard. And can take a while (it once took someone on my team three months to build a data set and do the analysis for a difficult business problem. But he nailed it and it changed how our business partners thought about the drivers of their business.

A cool site for the analyticly minded

Have you checked out Propser.com? It is like ebay for loans. You can be a Borrower or a seller of Loans. David Ye turned me onto it a while ago and I just setup an account. I like the low risk intro into the world of credit...