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Outside Insight: What Changes Now?

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The panel discussion at ‘Outside Insight” book launch. From right to left: Marc Ventresca, Andrew Stephen, Jorn Lyseggen, and Peter Tufano

Meltwater CEO Jorn Lyseggen thinks that companies should stop navel-gazing over their lagging internal  data —from last year’s financials, to last quarter’s sales figures— and extend their gaze outside, gathering data with the potential to reveal key information about their competitors, their customers, and the market’s general direction.

That is essentially the central thesis of Lyseggen’s book “Outside Insight“, published last week by Penguin.

In the book, Lyseggen lays out a new theory of corporate decision making— predicated on the use of external data such as social media posts, patent filings, and job postings. But he is also proposing the creation of a brand-new software category, which leverages machine learning to bring order to unstructured data available online, thus enabling executives to make better decisions.

How this will change management and decision-making was the main question Lyseggen himself and three economists from Oxford’s Saïd Business School discussed during the book launch in London on 12 October.

“We’re now shifting from a world built on comparative statics—built on yesterday’s lagging data and leading indicators— to this new category of software, which will force us to think about what data really means. We’re shifting  from looking backward as we move forward, to look forward in real time,” commented economic sociologist Marc Ventresca.

This, Ventresca said, is a long-needed change, but a change that could have some drawbacks in the same breath.  “Sometimes we don’t want to know all the data, because that would lead us not to experiment against those data. It could reduce our willingness to risk,” he said.

Listen to Jorn Lyseggen talking about his book on the SHACK15 podcast

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The panel also weighed in on the possibility that software could evolve from simply gathering and analysing the data to becoming an automatic decision-maker, capable of autonomously suggesting the best course of action to a company’s board.

“Companies could become simply enormous data-processing system,” Ventresca said.

Lyseggen ruled out that executives would lose their jobs to robots— but  he said that”[companies] will have more sophisticated decision making tools. We can imagine creating a dashboard that gives us a set of decision outcomes to choose from.”

He added that, while the Outside Insight method (and software) could rise to be the standard for all companies, that would not necessarily result in an insidious decisional uniformity, since “different companies will still have different capabilities and theses.”

Hard questions were also asked. Dean Peter Tufano observed that the advent of this new paradigm would —or should— force an overhaul of the curriculum of business and finance students, which is still largely modelled after an old-style conception of company.

Future managers and executives will definitely need more data literacy, although Lyseggen said that traditional leadership qualities are unlikely to ever become outdated.

And Associate Dean of Research Andrew Stephen wondered whether machine learning-aided harvesting of external data could eventually need some regulation, in order to avoid that companies—from credit rating firms to insurance companies—use information gathered from social media to the users’ disadvantage.

Outside Insight is coming, and it could change the face of more than just corporate decision-making.

Image via Meltwater/Instagram

Full disclosure: SHACK15 News is backed by Meltwater

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