Management Today

Australia's leading magazine for managers

Mr Big of data

28th Sep 2012 07:04
Mikael Hagstrom

Mikael Hagstrom says the ability to transform data from meaningless bits and bytes can change the way the world operates. By Amy Birchall

With 90 per cent of the world’s data created in the past two years, it is unsurprising the race for finding business value in big data has been likened to a modern-day gold rush. One man leading this charge is Norwegian-born Mikael Hagstrom, executive vice president for Europe, Middle East, Africa and Asia Pacific at global business analytics firm SAS. But it is social good, not profits, that motivates Hagstrom to drive SAS towards record growth.

Hagstrom began his career with SAS in sales support in 1989 in Sweden before rising through the ranks to his current role in 2007.

He says the ability to transform data from “meaningless bits and bytes” into valuable information has the potential to calculate and reduce CO2 emissions, track fraud using social networks, prevent child diabetes and even predict unemployment up to five months before an individual loses their job.

However, none of that is possible without an organised team, and managing 4500 employees across 48 countries, as Hagstrom does, is no easy task. Hagstrom says the best way to lead staff scattered across the globe is through regular face-to-face contact with customers and employees.

Based in the US, he travels to Europe twice a month and to Asia every six weeks. He has taken two trips to

Australia this year – on SAS’s corporate jet, of course.

“It is a fair bit of travel, but there is no substitute for spending time with employees or customers,” says Hagstrom, who spends about one third of his time meeting clients.

“I think that’s more important than internal meetings. I meet with customers every day of the week.

“I would not want to miss out on that ... you immediately feel a connection [in person]. You better understand their issues and can come up with new ways to solve them.”

SAS’s managing director for Australia and New Zealand David Bowie says Hagstrom is in touch frequently, but is far from a micro-manager.

Between Hagstrom’s visits to Australia he and Bowie have fortnightly video conference meetings. “I would say he’s pretty involved. He empowers us. He makes his expectations clear and lets us get on with it,” Bowie says.

Hagstrom says one of his key management issues is having the right leadership teams in place. While his US office is next door to that of SAS’s CEO and Forbes-listed billionaire Jim Goodnight, who is still closely involved in SAS’s day-to-day operations, Hagstrom takes his own approach to leadership.

“Helping people grow in their roles is absolutely most important,” Hagstrom says. “When you have a strong leadership team it trickles through the rest of the organisation.”

He fosters leadership qualities in others by encouraging individuals to take charge of projects they helped develop. “The person who came up with the idea usually understands it best,” he says. “My theory is that if you give someone an opportunity to run with an idea, they’re very passionate about it. They’ll take responsibility for it.”

Taking responsibility, and encouraging others to do the same, is a clear concern for Hagstrom.

He also believes big data analytics is more than just a tool for businesses to increase revenue, and argues it is socially irresponsible to even consider making important decisions without analytics.

“You will be surprised to see how many analytical decisions are made without analytics, like governments making decisions based on Excel spreadsheets,” he says.

“It seems quite random to me. You’d be surprised how many billion-dollar decisions are made on just a spreadsheet cover without having data assurance, without knowing if the numbers are right, without having simulations.”

He lists banks using big data analysis to reduce the risk of people defaulting on loans; decreasing medical misdiagnoses by 30 per cent; and tracking criminals as just a few of the social benefits of using analytics.

“That’s where I think big data is becoming a social responsibility,” he says.

In the United States, for example, Washington State’s Department of Labour and Industries uses data analytics to review unemployment and disability claims.

The system displays graphical reports that compare data over various time periods, and even scours social media sites and platforms to detect fraud. One unlucky disability claimant was caught out after the system discovered he had posted a video on YouTube showing himself on the top of a mountain.

Hagstrom also says widespread adoption of data analytics can prevent crimes long before they happen. He says if Norwegian police had used social media sentiment tracking, they would have been able to identify a shift in

Norwegian gunman Anders Behring Breivik’s online conversations and may have prevented him from killing 77 people in a mass-shooting and bombing last year.

“There is the possibility to identify shifts in behaviour and language. If the police had been using analytics they could have stepped in much earlier, not after the shootings had happened.”

Despite such examples, Hagstrom says the Australian market has been hesitant to buy in to big data analytics.

“Australia is well ahead of countries like India and Korea, but is falling behind relative to where it could be,” he says.

He says the Australian government in particular is focused on building infrastructure, such as eHealth, when the real benefits come from learning how to use data that already exists.

“It’s sad when organisations that are bulky and have lots of red tape, like the UN [which worked with SAS to predict unemployment spikes using social media chatter], can demonstrate they’re ahead of Australian businesses,” he says.

“My question is, when are we going to stop collecting data and start using it instead? It’s like building a road, but never driving on it.”

Big data, big money

Big data analytics has been heralded as the new big oil, and for good reason. Last year SAS achieved record global revenue of $2.6 billion, marking double-digit growth in its 36th profitable year.

Reflecting the importance of adapting quickly in a fast-changing industry, 24 per cent of revenue was spent on research and development.

SAS is the market leader in global analytics, with a 35 per cent market share. Its closest competitor, IBM, controls just 16 per cent of the market.

Hagstrom says this is in part because of SAS offering solutions that are faster and more accurate than its competitors, but tech writers have also speculated SAS’s growth is because of its ability to be a fast follower. That is, it lets its competitors prove the market and spend money on development and marketing, then swoops in to solve the hardest problems those clients face.

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