The Downfall of Tesco and the Omniscience of Analytics
Yesterday, an article in the Harvard Business Review provided food for thought for the analytics industry. In Tesco’s Downfall Is a Warning to Data-Driven Retailers, author Michael Schrage ponders how a darling of the “analytics as a competitive advantage” stories, British retailer Tesco, failed so spectacularly – despite a wealth of data and customer insight.
I make no claims to a completely unbiased opinion (I am, after all, in the analytic space.) However, from my vantage point, the true warning of Tesco lies in the unrealistic expectation (or, dare I say, hype) that ‘big data’ and predictive analytics can think for us.
It is all too common for companies to expect analytics to give them the answers, rather than providing the supporting material with which to make decisions. Analytics can not help you if you are not asking the right questions. After all, a compass can tell you where north is, but not that you should be going south. It is the reason we at Analytics Demystified prefer to think about being data informed, not data driven. Being ‘data driven’ removes the human responsibility to ask the right questions of, and take the right actions in response to, your data.
Ultimately, successful business decisions are an elusive combination of art and science. Tesco may have had the greatest analytics capabilities in the world, but without business sense to critically assess and appropriately act upon the data, it is a warning: considering analytics to have some kind of omniscience, rather than being a part of your business ‘tool box’, is to set it up to fail.
What do you think? Is Tesco’s downfall a failure of analytics? Leave your thoughts in the comments.