Monday, July 15, 2013

The Performance Report and The Insight

The Performance Report is the wrong vehicle to communicate an Insight.

The Performance Report 

Performance Reports periodically report the same set of Key Performance Indicators. The date on the calendar determines the cadence.

The best example of a Performance Report is below. It's from the last page of The Economist magazine. It is entitled "Output, prices and jobs".


It contains four (4) Key Performance Indicators. It is enumerated across 6 major thematic regions and a supplementary area called 'More Countries'. The KPI's are GDP (output), Industrial Production (output), Consumer Prices (prices), and Unemployment Rate (jobs). Only two indicators are broken out for trends - GDP and Consumer Prices. It has, in all, 10 columns of data. It contains notes about when the most recent piece of information came out.

This is a great periodical. It's been the same for as long as I can remember. It's scalable. It's been sustained. And it's been great at generating situational awareness.

It is has not undergone vanity metric inflation. The head of the United States hasn't insisted that Total Employed be added to bolster her specific business argument. China isn't arguing for their own vanity metric to get pushed to it. It's stable and practical.

The periodic performance report generates situational awareness. No more. No less.

The Economist has done a great job in keeping this table clean and consistent. It's a great resource, and, it's a great example of what I believe that situational awareness should be.

It is the wrong place to wedge in an Insight or two.

The Insight

The Economist magazine has a place for insights: it's the ~70 odd pages that precede the table in the back.

True insights are harder to mine. Merely staring at the table and writing two or three observations about it isn't an insight. Those are observations. That might be highlighting areas of interest. But that isn't an insight.

Quantifying and explaining the drivers of economic performance is valuable. The activity of probing and investigating yields insights. The act of producing the table is important. But it shouldn't be confused with insight generation.

The act of discovering an insight, and deciding if a given investigation is in the Firm's interest to know, is a very different activity.

It involves probing cause and effect. It also mandates that the underlining data be extracted, transformed, and loaded in a very different way from the needs of reporting periodical. Typically, time series data, and context about that time series, is required to discover good insights. In other words, the procedure for insight discovery, right down the roots of the data model, are different from situational reportage.

I think that when we try to jam the two formats together into the same artifact, we do real harm to ourselves. The Economist has a massive team of journalists and economists to report the world. Most firms only have a handful of people to handle, arguably, a lot more information than The Economist has access to.

The way we structure our system of activities should recognize and respect the differences between these two artifacts.

***

I'm Christopher Berry.
Definition of an insight.

1 comment:

phoenix seo said...

Insight reports are very much important. It gives us a hint on how the website works and the things that it's lacking. I am glad that you have shared this to us. Keep blogging. Have a nice day.