Managing Human Capital

I mentioned in an earlier post that I am taking a “Database and Web Analytics” elective class this first module of the fall term at GWSB MBA program. The required reading for this class is Competing on Analytics: The New Science of Winning – not exactly a textbook, but rather – a high view of employment of analytics in a wide range of businesses published by Harvard Business School Press. The book gives a lot of specific examples from real world companies and how they engage analytical methods, often interchangeably called business intelligence outside the book. I am still in the early chapters of the book so I could not give a thorough review of it. But so far it is an easy read mostly aimed at whetting you appetite for use of analytics in your business.

From the title of the book you could guess that the emphasis is not on applying business intelligence to routine operational processes, such as supply chain management, but rather on using analytics for getting competitive advantage through strategic enterprise-wide application of analytics to distinct capabilities of the company which may lie in various departments and functions, including supply chain management among others.

However the very first thing that perked my interest for the book was a forward by Gary Loveman, the CEO, and what not, of the Harrah’s Entertainment. I first learned about him while preparing analysis of the case Harrah’s Entertainment: Rewarding Our People in my Human Capital Management class in Spring Term 2010. The case was set in 2001, not long after Gary Loveman  started his full-time tenure with Harrah’s as a COO in 1999. The emphasis of that case was quite a bit different, so the analytical inclinations of Loveman did not shine through that much in the case, though there were cursory references to his MIT and HBS academic past.  That’s why I got intrigued to see him giving a forward to this book.

So I did a bit of digging around and found out that he is indeed a quant buff very heavily employing analytical methods, including statistical analyses, throughout the company. The article on Bloomberg.com reads like a business thriller – Loveman Plays `Purely Empirical’ Game as Harrah’s CEO. One of the highlights in the article for me, the poet that I am, was Loveman’s own admission: “The quantification on Macau took me in the opposite direction. You had to have a kind of intuitive courage and I am not well suited to those kinds of decisions” (emphasis mine). This was in reference to a particular deal, which Loveman called his worst mistake.

As for me, I have been getting more and more sold on the usefulness and importance of quantitative analysis and employment of business intelligence in the business throughout my course of studies in the part-time MBA program at GWU School of Business. Dah! And this article just confirmed that quantitative analysis and intuition have to work in accord, not at the expense of each other. Very difficult balancing act, escaping many otherwise brilliant people in business.

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