The Seven Axioms and Predictive Validity
I published seven axioms over the past week – in a not so humble fashion. I’m taking the James Burke line to heart and just putting it out there.
The Seven Axioms are:
1. The purpose of analytics is to derive competitive advantage for the organization / firm / entity.
2. Data alone does not yield competitive advantage.
3. A sequence of progressive hypothesis testing is the most efficient and effective method to derive competitive advantage from data.
4. Predicting the future requires an understanding of cause and effect.
5. Correlation is not always Causality.
6. Accuracy over Precision.
7. It is possible for there to be two optimal, equally true, answers to a problem. (And Sometimes More!) (X^2 = 4, x=-2, 2).
They might appear to be fairly straight-forward. And they are. In my opinion.
A statement like Accuracy over Precision was certain to cause problems. And it has.
If you look at the language around cause and effect, causality, and there being many correct right answers to the same problem: you get the point. It follows from the Axioms that, to derive competitive advantage, you need to be able to make predictions about the future, and the only way to really get there is through progressive hypothesis testing with accurate data, and understanding both complexity and causation.