A Convincing Analysis

Most people believe the job of an analyst is to present data in an objective, unbiased manner so that the consumers of the analysis can come to their own conclusions; however, sometimes an analyst is given the job to support an already foregone conclusion. Persuasive analytics often raises eyebrows, giving rise to unflattering axioms such as Mark Twain's, "There are three kinds of lies: lies, damned lies, and statistics." That said, data doesn't lie--people do. There's nothing inherently unethical about persuasion and data is a terrific way to support a conclusion.

An easy way to build a case with data analysis is to use the acronym IRAC--which stands for Issue, Rule, Analysis, Conclusion. It's a popular method that lawyers use to build and argue a case. Here's how to use IRAC to build a case with analytics:

  • Issue: This is where you state the issue or problem. In many cases, analytics is used to support a decision--this is where you would state the decision. Provide some background on the issue, then end with the phrase, "The issue is whether to [state the conclusion]." Position it as a decision; however, always state the conclusion you're supporting.
  • Rule: These are the widely accepted guidelines, policies, and other constraints that the decision is contained within. Lawyers would actually use court cases and/or statutes; however, you can use corporate policy, strategic values, or anything else that's widely accepted as a rule within your company. It's good to use a few rules that cover multiple stakeholders; the more rules you use, the more convincing your case will be.
  • Analysis: This is where all your hard work comes into play. For every rule stated in the previous section, provide a piece of analysis that supports your conclusion. Charts and graphs can be very convincing; include them here if you have them available.
  • Conclusion: Here's where you bring it home. Be very unequivocal about your conclusion, using your analysis to undergird your strong stance. Some analysts feel uneasy about committing so strongly to a position; however, if your job is to persuade and you believe in your analysis, you should have no problem standing behind it.

Putting It All Together

Here's a small example so you can see how the IRAC structure comes together. Let's say your CEO is trying to convince the Board of Directors that you should enter the luxury market with a high-value widget and a high price point. After doing your analyses, you stand behind the decision. With your help, the CEO might design a brief that looks like this:

For years, the XYZ Company has done well; however, its current widgets are starting to mature and it’s time to look at new products and markets. Over the last six months we've explored several ideas and after careful analysis there is an exciting opportunity to consider. The issue is whether to enter the luxury market and develop a new high-value widget.

The first of our five strategic values is growth. As we've stated many times to our shareholders and our employees, if we don't grow, we'll shrink. Furthermore, our fourth strategic value is to make wise, value-based investments that make money. Finally, it was the Board's decision last quarter that new product development cannot last more than a year before we release it to the market.

Entering into the luxury market presents a decisive opportunity for growth. Our detailed market analysis shows that a high-value offering to the luxury market will grow revenues by 42% in the first year and 74% in the second year. Furthermore, entering the luxury market is a wise investment. Since the luxury market is largely insensitive to price, our value analysis shows we can easily obtain margins of 65% to 70%. Finally, it will not take more than a year to develop and release this product to the market. Our product development analysis shows that we can develop this product within six months and if we work closely with Marketing, we can release it to the market no more than three months later.

Based on a comprehensive suite of detailed analyses, the inexorable conclusion is that we should enter the luxury market and develop a new high-value widget.

Summary

As a top analyst in your company, you'll sometimes be called upon to provide data analyses to support a decision. The IRAC method is a great way to quickly and effectively frame your analyses to support any conclusion. Take some time today to practice this on an analysis you've recently completed. If it works for top lawyers, it'll work for you too.