Fisher Center for Business Analytics to Tackle Difficult Data Problems

Assistant Professor Sameer Srivastava recently studied more than 10 million internal emails of employees at a mid-sized tech firm as part of his workplace culture research.

A complete archive of email messages exchanged among 601 full-time employees between 2009 and 2014 gave Srivastava and co-researcher Amir Goldberg of Stanford University the data they needed to explore the relationship between fitting in, standing out, and success within an organization.

Srivastava’s data intensive work is the exact kind of project that aligns with the mission of the Fisher Center for Business Analytics at Berkeley-Haas. Formerly known as the Fisher Center for IT, the center was renamed in February to acknowledge the growing interest of faculty, employers, and students in data science and analytics. The center remains funded through a grant from the Fisher family.

The center will bring data science resources from on and off campus under one umbrella, with a goal of learning about how data science is used to create business value, said Associate Marketing Professor Zsolt Katona, who serves as faculty director of the center, will work closely with Thomas Lee, an associate adjunct professor and the center’s director of data science.

Zsolt Katona
Zsolt Katona

“Our intent is to identify the most interesting, difficult data problems today that require state-of-the-art solutions and establish Haas’s leadership in data science as it applies to business,” Katona said. “We’re addressing the tough questions that require deeper investigation.”

Faculty will benefit because they will be doing cutting-edge scholarly work, while companies can benefit by being the first to explore the next big thing, he said.

Bridging the gap

The center will also help break down barriers that often crop up between MBAs and scientists at a time when data analytics skills are demanded in fields ranging from management to marketing to public policy.

“What you find is that companies hire data scientists or they hire MBA managers, but the two sides don’t effectively talk with each other,” Katona said. “We’re in a great position to bridge that gap.”

The new center will focus on three areas:

Creating resources for faculty: Faculty will be invited to submit funding proposals through the center, which plans to award $50,000 for data analytics research in 2017-2018. Conferences are also planned, where scholars from around the world will share their research.

Expanding corporate partnerships: Companies working with Haas will collaborate on research in multiple areas requiring big data expertise. Adobe, for example, has partnered with the center, sharing some of its internal scheduling data, which will be explored and analyzed by several faculty members who work across disciplines. The center also oversees a Speaker Series of outside industry experts who lecture at Haas on applying business analytics.

 Supporting students: MBA students taking Data and Decisions, a core course that introduces exploratory statistics and causal analysis, will find additional resources in the center to help strengthen their analytics skills. The first initiative will be to organize all analytics electives into formal structure that will eventually provide the foundation for a certificate in business analytics. The center will also host activities for graduate students from across campus, including a data visualization challenge. Executive education will also be a focus, with educational courses offered such as Data Strategy for Business Leaders.

Asst. Prof. Ming Hsu: Bringing Brains to Marketing

Researchers recently gathered in the basement lab of the Li Ka-Shing Center for Biomedical and Health Sciences at UC Berkeley to catch a glimpse into the future of marketing.

From all signs, the future points to brain scans, which promise to one day take some of the guesswork out of the field.

“We are trying to put numbers on some of the most difficult and intangible features of business: people’s thoughts and feelings,” says Ming Hsu, assistant professor in the Berkeley-Haas Marketing Group, (pictured below), who runs the Neuroeconomics Laboratory at UC Berkeley. “We’re using technology to quantify and measure what used to be thought of as qualitative or ephemeral.”

Hsu is on the bleeding edge of a relatively new research field, combining techniques borrowed from neuroscience, psychology, and economics into a single approach to learn how people make personal choices.

“Understanding how consumers think is fundamental to marketing and business,” he said. “If we can advance the current state by even a little bit, it would have a big impact.”

While Hsu’s recent research ranges from the link between honesty and the prefrontal region of the brain to how altering brain chemistry can make us more sensitive to inequality, the focus of this particular study is on how people think about brands.

Overall, Hsu’s research has a broader goal—to understand how consumers actually think and act.

“Even with the incredible changes in brain-scanning technology, neuroscientists have been restricted to offering marketing insights that are either too clumsy or too indirect,” says Leif Nelson, the Ewald T. Grether Professor in Business Administration & Marketing at Haas. “What Ming does is, for the first time I think, catch neuroscience up to the desires of marketing professionals.”

Searching for truth

Participants in Hsu’s studies have their brains scanned by a functional magnetic resonance imaging machine (fMRI). The idea is to study how dynamic changes in brain activity (thus, the the term fMRI) reflect and produce human thoughts, memories, and feelings.

Changes in neural activity results in vascular changes that have tiny effects on the magnetic properties of the brain, which are then picked up by the scanner. In this study, the goal is to address a fundamental and almost existential issue facing marketing, whether what people say matches what they actually think about well-known brands such as Apple, Disney, Ikea, BMW, and Nestle.

Once the test begins, Hsu’s team projects different brand logos on a screen and the volunteers are asked to think about what they see. All the while, the scanner is working in the background scanning their brain.

Then the real work begins as Hsu and his team pore through the data. Each brain scan involves tens of gigabytes of data and some of the bigger experiments even measure in the terabyte range. The researchers search for links between the brain activity and what the volunteers saw on screen. They watch to see whether the scans captured something about the way the brain processed responses to the different brands mentioned during the experiment and whether they triggered a particular pattern of brain activity.

“People say a lot of things, a lot of which are true but some are not,” according to Hsu. “We want to develop ways to separate these.”

The road to Haas

Hsu, who was born in Shanghai, moved to Arizona with his family when he was 10. He studied political science as an undergraduate at University of Arizona. But his academic future took a decisive turn when he attended a presentation by economics researchers explaining the use of fMRI to advance the understanding of game theory.

“There was this presentation about scanning people’s brains while they played economic games,” he says. “That’s when a light bulb went off in my head. I had never heard of anything like this and was pretty sure that not much was being done with it. The idea made so much sense. It sounded like such a neat way to ask questions and I would love to know what the answers were.”

He immersed himself in neuroscience and cognitive neuroscience. The deeper Hsu got into the subject, the more he saw the possibilities for using brain imaging techniques to gain a more coherent understanding of human economic behavior.

“By the mid-2000s, people realized that it’s not just a dream, but that we can actually do it,” he said.

After getting his PhD in Economics from the California Institute of Technology, Hsu arrived at the Haas School in 2009, where he began to put his ideas into practice.

“I didn’t have much of a marketing background but Haas was willing to take the risk,” Hsu recalled.

Peering over the horizon

Neuromarketing is a relatively new discipline that only began gaining traction in academia in the middle of the last decade. And as with any new field offering bold claims, it’s engendered skepticism and some controversy.

Some critics question whether the field can deliver on its promises. In a widely-read 2005 article, Princeton economists, Faruk Gul and Wolfgang Pesendorfer, dismissed the value of brain scans and attacked neuroeconomics as offering “no challenge to standard economic methodology.”

The other criticism centers on the ethics of peering into consumers’ brains and sharing insights with corporations.

Hsu said much of the negative reaction is based on an assumption that if you hand companies this technology, they will exploit it.

“I don’t know whether it’s because some people have a fondness for dystopian science fiction,” he said. “But with new technology, the first reaction is often, `This will result in something terrible.’ But that tends to ignore the possibilities of improving our lives as consumers.”

He said neuromarketing techniques can help companies to better understand and serve their customers with improved products and service that are more closely attuned to consumer desires. Instead of taking a participant’s response at face value, Hsu’s team can actually check whether what someone says actually corresponds with what they’re thinking.

That could prove to be a boon for marketers, who now must sift through reams of often contradictory information compiled from focus groups, surveys, social media, and dozens of other data sources, and figure out what consumers really want and need.

To be sure, marketers have been seeking neuroscience insights long before that was ever possible. While market researchers frequently describe themselves as trying to get inside the mind of consumers, that was only in the realm of metaphor. But as Hsu’s work brings researchers to a closer understanding of patterns of brain activation and how people think and feel about a brand, a new future is coming into focus.

“That’s where neuroscience—or any technology that can validate what people say, versus how they think—can help,” Hsu said. “Obviously this will be a long journey, but I’m very excited.”

Related: How to Trust What Customers Say About Your Brand

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