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Interview with Hernán Bruno and Jörn Grahl

"For scientists digital is a great field, but it is also a dangerous field"

"Data, Experiments and Decisions" - Executive Workshop in November 2017 Foto: Andrea Leon-Diaz

At the end of November 2017, a two-day executive workshop on the topic of "Data, Experiments and Decisions" was held for the first time at the University of Cologne. The Professors Hernán Bruno and Jörn Grahl led the workshop in which decision-makers from practice worked together with the researchers to solve business problems. In an interview, the professors talk about their research topics and look back on an exciting first Executive Workshop which also provided some surprises for the lecturers themselves.

You are both part of the research initiative on “Digital Transformation and Value Creation”. Researchers of different disciplines such as marketing, information systems, psychology and economics are engaged in various aspects of the “digital transformation” of the economy and society. The topic has many facets. In which ones are you particularly interested?

Bruno: Every aspect of society is being transformed by digital technologies, be it consumer, businesses or governments. This transformation is so fast and so deep that we need to focus on questions rather than disciplines. “How will businesses compete?”, “How will schoolchildren learn?”, “How will we organize our health care system?”. These are questions that require the skills of psychologist, economist, experts in management and policy.

I am very interested, for instance, in how we make decisions in the digital age. I study this by looking at large datasets from retailers, and also by asking consumers. In each case, we apply different methodologies, and take different perspectives. But the underlying question is the same.

Hernán Bruno

Most businesses still struggle with identifying which questions can their wealth of data answer.

Hernán Bruno, Professor of Marketing & Digital Environment

Grahl: I think we are both interested in topics that don’t go away soon. For scientists digital is a great field, but it is also a dangerous field. Radical innovation is common, we see hot new groundbreaking technologies almost every day. And it is tempting to attach yourself to a hype, because it is currently hot and you want to be first. But we have to constrain ourselves, try to separate signals from all the noise and identify topics that are substantive. We should be asking questions that are still important in 10, 20, even 50 years from now, at times when Facebook and Google might long be gone!

You are also both interested in analytics and data science. That’s a research interest that can have practical implications for companies. How can data be used by managers to make better decisions?

Bruno: Managers have been using digital data since the 1970s, when every business could afford a computer and started collecting commercial transactions. At that time, collecting the data was expensive, but analyzing it was straightforward. Fast forward to today, and we have infrastructure to collect data with unprecedented level of detail. We can store and transmit it. With this, we have also developed powerful analytical techniques to analyze these vast, diverse datasets and translate these analysis into actions and decisions. But most businesses are still lagging behind: they all collect data, but they have not made the next step of using that data to make decisions. In fact, most businesses still struggle with identifying which questions can their wealth of data answer.

Grahl: Which questions can be answered with which data and with which method is a very exciting topic. For example, many questions are what we scientists call "causal questions". "How does the marketing campaign influence sales?","How does the recommendation system change purchasing behaviour in the online shop?","How does the price influence the demand?". Such questions can often only be answered through experiments. Without experiments, you will quickly come to the wrong answers and thus to bad decisions.

Jörn Grahl

The workshop was risky, but I am very happy we did it.

Jörn Grahl, Professor of Digital Transformation & Analytics

At the end of November 2017, you organized an Executive Workshop on Data, Experiments and Decisions that brought together scientists experienced in analytics and data science and companies interested in using experiments to improve their business. Looking back at the workshop: What's your bottom line?

Grahl: It was great! It was risky, but I am very happy we did it.

What kind of risk do you mean?

Grahl: It was always clear for us that companies must know how to run good business experiments. But the question was, do they want to know? Turns out, yes - we had more than a dozen companies working with us on experimental designs for field experiments. That was incredible!

Which areas did the participants come from?

Bruno: We had a diverse group: retailing, pharmaceutical, media, education, consulting, law. It was very stimulating to see the different points of views and the commonalities across industries.

Were there any surprises in the workshop – also for you as a lecturer?

Grahl: When we prepared the materials we were discussing a lot the optimal breadth and depth of the workshop. You can explain experiments in a simple way, or you do it with statistics and data analysis. The statistics can be as complicated as you want them to be. We decided against complexity. We kept it very simple and intuitive. And we quickly realized they wanted more. More data, more statistics, more tools and software, more analysis. That was a very pleasant surprise. By the way, we will add these things to the next edition of workshop.

Bruno: I was impressed by how much participants gave each other feedback even though we set up groups with very different interests. This is the advantage of a hands-on workshop: you don’t need to learn from the teacher, but from your peers. We are there to provide general principles and discuss techniques. But more importantly, our role is to provide a framework to discuss, a language, a perspective. Once the participants obtain these tools, we get this multiplier effect where everyone can be a teacher, and everyone a learner (including ourselves).

It is important to understand what problems companies are facing, what kind of solutions executives are discussing, and how they make decisions.

Jörn Grahl, Professor of Digital Transformation & Analytics

What did the participants gain? And did you as researchers also profit from the insights of the participants?

Grahl: The participants learned how to design, run, and analyze good business experiments. That is my hope, at least. As researchers we learned a lot, too. It is important to understand what problems companies are facing, what kind of solutions executives are discussing, and how they make decisions. We profited a lot from the interactions during the workshop.

Would you like to offer further Executive Workshops? On the same or on another topic?

Grahl: Absolutely. The second edition of this workshop is already in the making. We plan to make it a bit larger, adding much of the materials and ideas that the participants suggested.

Bruno: We would like to stay within the same topic, perhaps making it a little broader. But it is important to keep the same objectives, to perfect the workshop and to encourage previous participants to become part of a larger community.

How was the feedback from the participants?

Bruno: Very positive. In fact, the participants were hungry for more technical detail and getting their hands dirty with data analysis. So we may see more of that in the next iteration.

What are the next projects you are actually working on or that you are planning to do?

Grahl: I hope that one or the other of the experiments that we designed during the workshop materializes as a joint project between industry and academia. That would be great!

Bruno: I agree. We also have a long-term view. The workshop perhaps seeds an idea that leads to a future collaboration, once that idea grows within the organization.

Professor Grahl, Professor Bruno, thank you very much for the interview!

 

Interview: Sarah Brender.