Business Implications of Analysis

“And,” she said, “we found that the more rooms a hotel has, the higher the positive rating.”

I was at NUS (National University of Singapore) in my Master’s class — listening to my peers present their analysis on the relationship between hotel class (e.g. budget, mid-scale and luxury) and the ratings of several key attributes (e.g. location, value, service) based on online reviews.

By now, having been through ten presentations on the same topic in the last couple of hours, it was clear that there was a link between hotel class and attribute ratings: higher class hotels tended to get better reviews.

But something was missing in most of these presentations (mine included, unfortunately): there wasn’t a business problem to be solved. It was simply analysis for analysis’ sake. Through it all I couldn’t help but think, “so what?”

So what if I knew that a budget customer’s standard of “service quality” was different from that of the patron of a luxury class hotel? So what if I knew that economy-class hotels didn’t differ from mid-scale hotels but differed with upper-scale hotels? So what if I knew that hotels with more rooms tended to have more positive reviews?

(And on this last point, it was a rather common “finding”: it was found that hotels with more rooms tended to have higher ratings, and presented as if if you wanted higher ratings, you might want to build hotels with more rooms; the problem of course is that larger hotels with more rooms tend to be of the higher-end variety; budget and independent hotels tended to have fewer rooms. Would the business implication then be that even budget hotels with more rooms will improve their ratings? Probably not.)

In the end the 15 presentations or so that we went through just felt like a whole lot of fluff. Sure he analytical conclusions were technically correct; statistically  sound. But so what?

It reminded me that you can be great at analysis, but without an understanding of the business, without a mindset of constantly questioning “so what does this mean — what are the implications on the business?”, all your analytical prowess would be for naught.