Predictions are a Tricky Business

Predictions are a Tricky Business

For all of us who are “March Madness” fans, this is a great article: https://www.ncaa.com/news/basketball-men/bracketiq/2018-04-03/ncaa-bracket-was-better-all-rest-2018 Given all the upsets in the first round of the tournament this year, some lucky ESPN entrant, “Che 3”, accurately guessed 80% of the games, including the finals matchup and the eventual winner, Villanova. That’s impressive. Until you realize that there were 17.3 million entrees into the ESPN contest. And the best one was only 80% right. Predicting the future is a tricky business. Joshua Ramos wrote a fascinating novel on the topic called “The Age of the Unthinkable.” Basically, it’s a bunch of case studies on how bad we humans are at predicting the future. Even the really smart humans. https://www.amazon.com/Unthinkable-First-Joshua-Cooper-Ramo/dp/1408700581/ref=sr_1_2?s=books&ie=UTF8&qid=1522851729&sr=1-2&keywords=the+age+of+the+unthinkable&dpID=415KoqBr8kL&preST=_SY291_BO1,204,203,200_QL40_&dpSrc=srch Part of what we do at Analytical Ones is to forecast future revenue for nonprofit organizations. And we think we have a pretty good model. But it’s not a perfect model. There are no perfect models, as there are always variables that affect results that are impossible to predict. But we get way closer than 80% with a lot fewer than 17.3 million...
Bearing Down

Bearing Down

Many people that work in the numbers business, including us, have been saying for a while now that the stock market is overcooked, and a big correction is inevitable – so the major dive in the Dow Jones yesterday was not a huge surprise. No matter where we end up in the next few days, many finance gurus are still predicting a drop of 30% or more. This article by David Rosenberg, the chief economist at Gluskin Sheff, was reposted by Business Insider on January 11, 2018, explains the trends in an easy to absorb manner: http://www.businessinsider.com/markets-look-stretched-rosenberg-says-2018-1 Of course, Mr. Rosenberg is counseling private investors. At Analytical Ones, we are consulting with nonprofit organizations. And all of us that worked in fundraising through the market collapse of 2008 know that philanthropy is closely tied to market performance. So, what did we learn a decade ago that will help us prepare this time around? This is what you can expect it see: The recession of 2008 had a catastrophic effect on new donor acquisition. It has only been in the last couple of years that organizations have recovered in this area. In times of economic uncertainty, donors are unlikely to add organizations to support. Large donors dried up. Again, in times of economic uncertainty, its tougher for donors to write those big checks. Loyal donors continued to give – and they gave generously. Knowing these things, here’s what we recommend you should be doing now: Even with the drop yesterday, the market is still strong. Now is the time to be investing as much as you can in new donor...
Facts

Facts

  “Facts all come with points of view Facts don’t do what I want them to” – from the Talking Heads’ song Crosseyed and Painless As an analyst, this has always been one of my favorite Talking Heads songs. The academic term for “facts all come with points of view” is value impregnation. It’s the idea that the analyst already has the conclusion in mind from the get-go and their objective is to just find data that supports what they already believe to be true. This lyric does really point to an on-going challenge not only among analysts, but throughout our culture today. And it’s very dangerous. I learned this early in my career. When I was still in grad school, I worked at a University’s research lab. One day, a representative from a large well-known national corporation walked into my office, and offered to do a very big-budgeted research project with us – if – we could guarantee that the research findings would support his agenda. It was an early lesson in the slippery slope of incremental corruption. Of course, we turned that project down. One of the great joys of working at Analytical Ones is that we are free to follow wherever the data leads. You can always trust the insights we provide are grounded in your data....
Don’t Just Be Smart – Be Emotionally Intelligent

Don’t Just Be Smart – Be Emotionally Intelligent

This is the final in a series of blogs on 2018 trends. You can read about the first four trends here. The last trend for 2018 that Forbes highlights is: Don’t just be smart. Be emotionally intelligent. As someone who has managed a number of analysts, I totally understand this one. Throughout my career I have worked with some super smart analysts. Brilliant analysts. Analysts who could write code in circles around me 24/7. However, what I found is that “smart” is only minor variable in the algorithm of success. If an analyst didn’t possess a high co-efficient of emotional intelligence, they were usually a disappointment. I’m sure you’ve seen the same thing at the places where you have worked. Sometimes the “best” candidate fails because they can’t connect with others or don’t fit the organization’s culture. I like the way Peter Drucker talked about this, “Culture eats strategy for breakfast.” Ultimately, we are all in the people business. And it’s best for you to fill your organization with people that have emotional intelligence. Because reading between the lines is a critical component of your organization’s...
Stop Worrying about Artificial Intelligence – Start Focusing on Augmented Intelligence

Stop Worrying about Artificial Intelligence – Start Focusing on Augmented Intelligence

This is the fourth in a series of blogs on 2018 trends. You can read about the first three trends here. The next trend for 2018 identified in the Forbes article is: Stop worrying about Artificial Intelligence. Start focusing on Augmented Intelligence. By that they mean leverage the data you already have with capable analysts. We could not agree more. If you have followed this blog very long, you will know one of our repetitive (and languishing) topics is the amount of resources some nonprofits spend on CRM systems compared to the amount they spend on people to gain insights from their current data. No CRM system will bring your organization insights. I think one of the common misconceptions is thinking: if only I had a state of the art database, all my decisions would be so much easier. What we have seen over and over again is that you don’t need to have a complex CRM system to enable insights. You just need some smart analysts. So, before you budget $X million on a new CRM system, try contracting with an analytics company for a year, and see if they can’t deliver the insights you require at a fraction of the...