How do you approach unfamiliar data? An investment banker I talked to last week — one I know from a client’s whitepaper — rejects the “don’t think” method, advocated in my earlier post about Dan Murray. Instead, he thinks first, on paper.
“My approach is driven by having a bunch of gray hair,” says Michael Princi, managing director of ThoughtStorm Strategic Capital, a boutique investment bank and advisory firm in northern New Jersey. “I want to use my business acumen to tease out what might be the underlying issues.”
Experience counts The naive mind is prone to bad mistakes, he says. Take, for example, the 22-year-old analyst in India he employed who spotted this correlation: a firm’s revenue correlated with the number of Bobs in the workforce.
Hypothesize on paper “I first think through my hypothesis on paper,” he says. “‘It gives you a starting point.” If the model is wrong, as it often is, he just tries another one.
Test and repeat If the actual numbers are somewhat close to his expectations, he knows he’s on the right track. It’s the traditional consulting confirm-or-deny method. When the data does confirm his hypothesis, he’s able to run through the data again and again in iterations.
Test and repeat If the actual numbers are somewhat close to his expectations, he knows he’s on the right track. “It’s the traditional consulting confirm-or-deny method. It’s the quickest way I know. When the data does confirm his hypothesis, he’s able to run through the data again and again in iterations.
Does Michael Princi really analyze data differently from Dan Murray? They’ve never met, but Michael guesses not. He says of Dan, “I think he’s probably mapping it out intuitively.”
Do you have a routine for analyzing unfamiliar data? Please introduce yourself here.
I doubt that we’re really approaching things that differently. Sometimes I sketch ideas on paper before I start to analyze data.
The difference may be that I’m working a many industries and need to do more exploratory (type 3 discovery) to tease out interesting facts.
Of course – different people approach analysis and problem solving in different ways. Sometimes situations dictate a more structured approach if you’re looking for some kind of specific solution.