Since 1999, Babson College and the London Business School have conducted an annual survey of entrepreneurs across the world, asking them many different questions including their motivations for starting a business. In 2024, the most common response among early-stage entrepreneurs worldwide was ‘to earn a living because jobs are scarce’ followed by ‘to build great wealth or very high income’.
These findings offer a reality check for the romanticized view of entrepreneurship. While many business leaders may claim to be driven by a desire to make the world a better place or solve pressing social issues, the financial incentives often take precedence. The truth is, businesses exist to make money, and the pursuit of profit is what ultimately sustains their operations. Even when businesses tackle societal problems, they must be profitable to continue their work and scale their impact. This doesn’t mean that solving problems or creating social value is secondary—it simply acknowledges that without a viable business model, the ability to effect lasting change is limited.
According to shareholder theory, the primary responsibility of a business is to maximize value for its shareholders, often equating success with financial performance. This theory positions profit generation as the ultimate goal, where business decisions are made primarily with the interest of shareholders in mind. It reflects the view that the primary duty of a company is to increase its market value, typically through strategies that boost short-term profitability or long-term growth.
In contrast, stakeholder theory expands on this by proposing that a business should consider the interests of all its stakeholders—not just shareholders—such as employees, customers, suppliers, and the wider community. Stakeholder theory argues that businesses thrive when they create value for all parties involved, fostering sustainable practices that can lead to long-term success. While shareholder theory focuses on profit maximization, stakeholder theory emphasizes balancing competing interests to build a more inclusive and ethically responsible model of business. I have provided this context to set the stage for the conversation of the role that information technology (IT) should play in supporting the goals of the business.
“Complaining is not a strategy. You have to work with the world as you find it, not as you would have it be” — Jeff Bezos5.
If the goal of business is to generate value (whether for shareholders or stakeholders), then the goal of any function within that business—including analytics—must be subservient to that goal.
There is a tendency among new data scientists and analytics students to romanticize the tools. They fall in love with the elegance of a neural network or the complexity of a Python script. But in a business context, these tools are merely means to an end. You are not paid to play with numbers; you are paid to help the business win.
As marketing professor Theodore Levitt famously said, "People don’t want to buy a quarter-inch drill. They want a quarter-inch hole."
In analytics, your Python script, your SQL database, and your Tableau dashboard are the drills. The manager does not want the drill. They want the "hole"—which is the reduction of uncertainty in a specific business decision. We must align our tools to the desired outcome, not the other way around.
To ground this reality, we turn to the Information Systems Strategy Triangle. This framework helps us visualize the necessary alignment between three points:
The "Timeless" lesson here is simple but often ignored: The Business Strategy must drive the Analytics Strategy.
If the analytics team is building complex AI models to predict customer sentiment (a Customer Intimacy tool), but the business strategy is to cut costs and sell generic commodities (an Operational Excellence strategy), the analytics team has failed. They are building a Ferrari engine for a tractor. It is impressive engineering, but it does not help the farmer plow the field.