Doherty Emerging Professor of Entrepreneurship Sean McMahon studies importance of ‘lean data’ in management process.
Sean McMahon, Doherty Emerging Professor of Entrepreneurship in the Martha and Spencer Love School of Business, authored the paper “Lean data: How small insights drive big data innovation," which was published in the September issue of Organizational Dynamics.
The paper reflects upon the overlooked signs leading to the Great Recession of 2007 and examines the value of adding ‘lean data’ to the management process.
The paper’s abstract reads:
Have you seen "The Big Short," the Hollywood movie about a small group of investors who anticipated the 2007–2009 collapse of the subprime mortgage market? Big Wall Street firms, using data modeling, developed financial investments that made money as long as the housing market continued to boom, but were blind to – or chose not to see – simpler metrics suggesting significant weaknesses in the grand strategy. Those investors who were willing to buck conventional wisdom, who saw the situation for what it really was, won when the Great Recession began in December of 2007. These individuals did not develop their contrarian position with a crystal ball, but they did not rely on widely-accepted data indicators, either. They compared smaller sets of data, often data that they themselves collected, against the seemingly unfaltering numbers of the housing boom. It was the conflicting signals between these two sources that allowed them to recognize an opportunity.
The Great Recession spawned by the subprime mortgage bubble chronicled in "The Big Short" ended years ago, but the data revolution is just getting underway. Data analytics are everywhere, guiding website clicks, directing logistics for physical goods, and steering long-term strategy. Machine learning and artificial intelligence (AI), though still relatively early in their development, make front page news on a daily basis. This is happening, and it will be game-changing. What do you do if you are not a computer programmer or an analytics guru? How do keep your skill-set from becoming like those millions of mortgages that were suddenly overpriced and unsustainable? If you have an opportunity to acquire technical skills for data analytics, database creation and management, AI, or other programming skills, take advantage of that opportunity. But, if you do not, all is not lost. The purpose of this paper is to urge you to add ‘lean data’ to the creativity, critical thinking, and leadership that got you where you are today.
McMahon joined the Love School of Business in 2013. His research has been published in Organizational Dynamics, Entrepreneurship Theory and Practice, Applied Psychology, and Organizational Behavior and Human Decision Making.
Organizational Dynamics publishes papers that link leading-edge thought and research with management practice in the field of organizational behavior, human resource management, and strategic management.