Under every Complex Formula is …

Look at some of the quotes from the news media on companies with a data driven approach to management and business decisions

  1. Applying a complex equation to a basic human-resource problem is pure Google, a company that made using heavy data to drive decisions one of its “Ten Golden Rules” outlined in 2005. (WSJ on Google’s HR plans)
  2. Like Google, Facebook calculated the relevancy and authority of information before deciding to display it to me. The News Feed was shockingly complex — calculating and ranking more than a trillion items per day — and the results were very satisfying.  (WSJ on Facebook Newsfeed)
  3. Mr. Donahoe installed an entirely new system to determine which items appear first in a search. It uses a complicated formula that takes into account price and how well an item’s seller ranks in customer satisfaction. (WSJ on eBay)
  4. What could be more baffling than a capitalist corporation that gives away its best services, doesn’t set the prices for the ads that support it, and turns away customers because their ads don’t measure up to its complex formulas? (Wired on Google)
  5. CineMatch, on the other hand, is all math. It matches your viewing and rating history with people who have similar histories. It uses those similar profiles to predict which movies you are likely to enjoy. That’s what these recommendations really are – predictions of which movies you will like. (Netflix movie recommendation)

I am willing to bet that underneath the complexity is a multiple regression model, built with multiple variable and constantly tuned to better future behavior from past actions. Every business collects or has the opportunity to collect significant customer data. Companies like Google and eBay strive to be accurate 99% of the time or more. But building a regression model even with a handful of variables can improve decision making over driving without a dashboard.

Are your decisions data driven? If not I can help you build a model.