This week I attended the RSA Security Analytics Summit in Washington D.C. and had the incredible opportunity to meet one of the smartest individuals to date. Nate Silver was the keynote and he covered a lot of ground including 1) an analogy of the proliferation of information via the printing press in 1440 and the most recently the world wide web in 1990; 2) The End of Theory: The Data Deluge Making the Scientific Method Obsolete; 3) The 538 method and lessons from the 2012 elections; 4) the influence of bias in big data 5) the “Signal-to-Noise” ratio which results in increased variables that occur along with the need for a true distribution model to enable trend effective trend analysis; 6) the limitation of technology in some cases where technology was deemed more powerful and a better predictor than the human brain and 7) the use of mathematics to help with predictive modeling. As you can see from the list of topics the presentation was truly engaging and thought provoking.
Towards the end of the presentation Nate Silver provided a suggested approach that not only solidified his presentation but provided actionable guidance in how to better use data as a predictor. The suggested approach is as follows:
1) Think Probabilistically
2) Know Where You’re Coming From
3) Survey the Data Landscape
4) Try, and Err
When given the above guidance, which is clearly outlined in his book The Signal and the Noise, I instantly was able to relate to point number 2….”know where you are coming from” to risk management. The reason why it resonated with me so much is that I am a communications major and studied countless hours both in theory and practice on intra/inter personal relationships. As I work with organizations and listen to the different approaches to risk management using predictive analysis I find people in the risk management profession often overlook the power of knowing where people or in this case risks are coming from within the organization. Risks to financial data or healthcare records are different from risks to a conference room portal application. People must apply common sense to sophisticated models of risk analysis. The only way to get common sense is to drive context into the relationship of the risk to the expected results or impact to the business.
The need for context (common sense) has never been greater. As you look to drive your risk management or even security practices within our organization you must have all four elements in place not just 1, 3 and 4. Context of the risk will empower you to respond in a logical, appropriate, timely and effective manner. Context will also enable you to ensure the people, departments, divisions understand the impact to their world and can also enables the conversations you need to have executive leadership for relational visibility into the risks that truly impact the their world. Without context you will provide less meaningful data and increase the risk exposure to your organization.
In closing I recommend reading Nate Silver’s book The Signal and The Noise and look forward to seeing how all of you apply his astute suggested approach.