The importance of data based decision making (part 2)

(continued from previous post)

Question 3 - So how does analytics empower decision-making at eBay?

Analytics has to be embedded in the core of the organisation and not be a satellite function. At eBay this function reports into Finance and this generates several advantages:

1- as members of a “central" function our end-of-year bonuses do very loosely depend on sales, hence we can be objective and maintain an unbiased view on what we find out and the insights we deliver.

2- we are in the same reporting line as the teams maintaining the P&L hence we can, and have to, participate in investment decision making to provide a balanced view of the ROI of each investment the teams we support are willing to make; an interesting effect of this is that we have made the P&L a tool to make trade-off decisions during the year rather than a consequence of  actions at the end of it. This is particularly important for publicly traded companies as it helps keep track of performance during quarters in a very tight way.

3- reporting to the CFO grants us a very effective escalation path in case there’s friction between our views and the desires of our business partners (very recently one of our analyses stopped a very deep change to the site policies to go live, highlighting a relevant risk that had been overlooked until that point).

Being part of finance and having CFO reporting lines allows analytics to be involved and empowered at the highest level.

Question 4 - What are the key advantages of analytics and data based decision making?

There’s a quote I like that I think summarises the reason why analytics is so important: "take risks: if you win, you’ll be happy, if you lose, you’ll be wise".

Our job is not necessarily to come up with new ideas or drive innovation and not for a second do I think all decisions should come from data. Henry Ford is accredited with the quote “If I had asked people what they wanted, they would have said faster horses”, and if he had listened to them we would not have cars. When thinking about an actions to take, an investment for example, data should have a marginal role on the WHAT (that is where intuition still can bring disruption), but should have a critical and central role on the HOW. It helps manage expectations at all levels, it helps fostering conversations about financial and business consequences very early in the process and it makes sure there is no misunderstanding in what the success of that action looks like. 

Even when things don’t go according to plan, a data based decision offers a model to take as reference and understand which of the assumptions was wrong, thus generating knowledge that will be used to make a better decision in the future.

More accountability, more transparency, clear expectations: a decision based on data is, simply, a better decision.

Question 5 - What kind of profiles are needed to succeed in analytics at eBay?

We need people who can speak 2 languages: the data one and the business one.

Our interview process is very thorough and we assess candidates on 4 main dimensions:

- diversity: our 12 people team team currently has people from 9 countries and 4 continents 

- cultural fit: we look for the right mix of ambition and team spirit (we are a highly collaborative environment but independence, courage and drive are winning elements when dealing with complex analyses)

- technical capabilities: we run tests on logic, coding and tools usage

- business acumen: we ask very broad, open ended questions to see how a candidate thinks when given a problem to solve. It’s not about the answers the candidate gives, it’s a about the questions he asks to get to a solution that matter to the process.

To succeed as analysts we need people that could, theoretically, fit equally well in the jobs of the partners they support. An example of this is my own career as I have not always worked in analytics. Although I started as business analyst, I also covered roles in Business Development, Operations and Marketing before becoming Head of Analytics at eBay.