HOW DO YOU DEVELOP ANALYTICAL MODELS?
Model-making is at the heart of analytics. Despite the mathematics that underlies statistical and machine learning models, analytical leaders say that creating effective analytical models requires a combination of art and science.
The art involves selecting variables that might correlate with a desired outcome. It also might involve allowing analysts to override statistical models based on their industry knowledge, as it does at Kelley Blue Book. Many companies today apply a combination of rules based on human experience (i.e., art) and statistical models (i.e., science) to optimize model outcomes. Our analytical leaders spend significant time discussing the role of art and science and other ...