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:
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.
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.