Of all the discoveries made in the 20th century one of the most tectonic was the discovery of the double-helix structure of DNA, the molecule containing human genes, by Cambridge University scientists James D. Watson and Francis H. C. Crick. According to This Day in History, it was on this day in 1953 that they “determined that the structure of DNA was a double-helix polymer, or a spiral of two DNA strands, each containing a long chain of monomer nucleotides, wound around each other. According to their findings, DNA replicated itself by separating into individual strands, each of which became the template for a new double helix.”
“Somewhat hilariously in his best-selling book, The Double Helix (1968), Watson later claimed that Crick announced the discovery by walking into the nearby Eagle Pub and blurting out that “we had found the secret of life.” The truth wasn’t that far off, as Watson and Crick had solved a fundamental mystery of science–how it was possible for genetic instructions to be held inside organisms and passed from generation to generation.” The formal public announcement was made some two months later with the publication of an article in Nature magazine. Crick, Watson and one other scientist were awarded the Nobel Prize for their discovery in 1962.
I thought about this momentous discovery and its wayward initial announcement when I read a recent piece in the MIT Sloan Management Review, entitled “Why Your Company Needs Data Translators”, by Chris Brady, Mike Forde and Simon Chadwick. In their article the authors draw from their work in the field of sports analytics to conclude that there should be a corporate function which bridges the disconnect between data scientists and executive decision makers; what the authors term the data translator.
It is certainly not hard to see how this relates to a Chief Compliance Officer (CCO) or compliance professional as most of us came to the position from the legal department or General Counsel’s office, most usually with legal training only. To say that lawyers are deficient in their ability to utilize data analytics belies a much larger corporate deficiency which exists in what the authors call the “persistent cultural divide between the decision makers on the field and the data analysts who crunch numbers off of it.” The authors later phrased it another way as, “A key issue that emerged from these meetings was the recognition of this consistent disconnect within performance management practice between “big data” analysts and the decision makers they support. This is evidenced by the predominantly dismissive attitude of many executive decision makers (general managers, head coaches, CEOs, COOs, etc.) to both the data itself and those responsible for delivering it — an attitude often born largely out of ignorance or fear.”
This gap between the data analytics professionals, who the authors call “the quants” and the front line decision makers is similar to that in the compliance space, challenging. The authors call this gap the “interpretation gap” and believe it can be filled by “data translators”, who work to bridge this gap. The authors identified four key reasons for data translators.
First is that the person doing the translations needs to avoid what the authors term “data hubris” which the authors cite to David Lazer for the definition. It is “the often implicit assumption that big data are a substitute for, rather than a supplement to, traditional data collection and analysis.” The heart of this condition is forgetting that data interpretation requires a wide range of skills around not simply what the data means but the other information which should be evaluated with the data or what R.C. Buford calls the “alignment of multiple variables – the eyes, the ears, the numbers.” For any compliance practitioner this means considering all of the variables to help determine what the data or sometime the lack of data might mean.
The next is decision-making biases from which the translator “must remain aware that any point of view, even one derived from extensive research and rock-solid facts, carries potential biases.” Another way to consider this is the “overconfidence bias” where “an individual’s confidence in his or her own judgment is at odds with reality.” Another bias the authors consider is the emotional bias which “occurs when the decision maker lets outside noise influence his decisions.” The role of the translator is to eliminate this noise in the interpretive process.
The next identified was the “need for linguistic common ground” where the problem is really one about communication. The reams and reams of data can be numbing when presented in spreadsheet form, which is usually what the quants present. The authors believe that data tells a story and it is that story which should be presented. They advocate “approaches that bring otherwise dry information to life. These approaches include data visualization, process simulation, text and voice analytics, and social media analysis.”
Interestingly, the authors believe that subject matter experts (SMEs) should be the primary data translators because such persons have a “high level of practical experience, which is difficult to acquire on a theoretical basis, and it also lends itself more readily to the storytelling ability that must be an essential skill of the data translators.” This would seem to be the calling card of a compliance professional who not only understands the compliance side of the organization but who also understands the business side of the company.
This is why lawyers in the legal department are generally not suited to provide this type of internal corporate reporting. First they generally do not have a business background and professional business training. This does not give the credibility needed with senior management in areas outside law. Additionally, the law department does not see its role to speak truth to power. Lawyers generally do not say no because they are there to advise, not to prevent, detect and remediate corporate issues. Compliance professionals embody a wider variety of corporate skills and intellectual curiosity.
The authors end their piece with the following, “Bridging the cultural gap between domain specialists and analytics specialists within organizations with an interpretation function performed by a data translator can begin to address the disparity between the claims for big data and its reality. That process begins with recognizing the limitations of what numbers and intuition can do separately.” Just as Crick and Watson discovered the structure of the double-helix and made its connection to DNA as the building block of nature, the role of the compliance practitioner can provide a solid basis for considering the wide range of information available to a corporation from its compliance function. And do not forget the story telling, especially visual story telling.
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© Thomas R. Fox, 2017