Analytical Skills for AI and Data Science

Chapter 2. Intro to Analytical Thinking

In the last chapter, I defined analytical thinking as the ability to translate business problems into prescriptive solutions. There is a lot to unpack from this definition, and this will be our task in this chapter.

To really understand the power of prescriptive solutions, I will start by precisely defining each of the three stages present in any analysis of business decisions: these are the descriptive, predictive, and prescriptive steps we have already mentioned in Chapter 1.

Since one crucial skill in our analytical toolbox will be formulating the right business questions from the outset, I will provide an initial glimpse into this topic. Spoiler alert: we only care about business questions that entail business decisions. We will then dissect decisions into levers, consequences, and business results. The link between levers and consequences is intermediated by causation, so I will spend quite a bit of time talking about this topic. Finally, I will talk about the role that uncertainty plays in business decisions. Each of these topics is tied to one skill that will be developed throughout the book.

What Is a Lever?

In the context of this book, “levers” are synonymous with “actions” or “decisions,” so whenever we say that “we want to pull some lever to obtain a business outcome,” this means that we are looking for suitable actions or decisions.

Descriptive, Predictive, and Prescriptive Questions

In Chapter 1, we saw that data maturity ...