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Nate Silver turns business analytics into smart business decisions

CIOs can learn to turn business analytics into smart decisions from Nate Silver, who predicts everything from election results to Hall of Fame votes.

To turn business analytics into smart business decisions, sometimes you need to look in unlikely places.

Many of you have heard about Nate Silver, the New York Times FiveThirtyEight blogger and author who used survey data and statistical analysis to correctly predict the outcome of the November presidential election -- in every state and the national total.

You might not know that Silver started out his statistical and research wizardry in sports, with Baseball Prospectus, a publication known for its expertise in the practice of sabermetrics, a discipline that asks new questions about existing statistical data to achieve new insights into player performance.

Silver went back to his roots recently in analyzing the vote for the baseball Hall of Fame. He wrote a piece in The New York Times that came out the morning before the official votes were announced, predicting that no one would get in this year. He was correct. He also showed how the steroid era is having a negative effect, not only on known steroid users but also on nonusers.

What does this have to do with business analytics? A lot, if you consider the possibilities of the new kinds of information that can be uncovered if the right data is found and the right questions about that data are asked.

In her recent story, SearchCIO.com news director Linda Tucci discusses how the Obama campaign used "microtargeting" techniques to read the polls -- more specifically, read how the polls were changing and evolving during the campaign. She quotes Todd Thibodeaux, president and CEO at user group CompTIA Inc., regarding the Obama and Romney campaigns' use of data:

"It was almost as if one group was trying to make things happen with the use of their data, and the other group was trying to figure out what to do, based on what had already happened. Historical data may not be as useful as it used to be in some of these contexts."

Businesses pay a lot of attention to data about what worked, but not a lot to data that tells them what might happen through predictive analytics.

How many businesses are guilty of the same transgression? Businesses pay a lot of attention to data about what worked, but not a lot to data that tells them what might happen through predictive analytics.

This type of analysis goes beyond the by-now-too-familiar uses of business intelligence as "personalization" tools for retailers. If I go on Amazon.com once to look for books by David Foster Wallace, does that mean that every time I go back to the site, I have to have more David Foster Wallace books presented to me?

This is more about creating a strategy; then trusting the strategy, the intestinal fortitude of your team -- and especially the data -- in order to, as the successful Obama campaign did, "make things happen."

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Nate Silver on data-driven business strategy

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