Being data centric, placing data at the heart of your business.
At the end of 2016 McKinsey Global Institute released – The Age of Analytics report.
In it they revealed:
- The biggest barriers companies face in extracting value from data and analytics are organizational; many struggle to incorporate data-driven insights into day-to-day business processes
- Leading companies are using their capabilities not only to improve their core operations but to launch entirely new business models. The network effects of digital platforms are creating a winner-take-most dynamic in some markets.
- Data and analytics underpin several disruptive models. Hyperscale digital platforms can match buyers and sellers in real time, transforming inefficient markets
- Above all, data and analytics can enable faster and more evidence- based decision making.
- MOST COMPANIES ARE CAPTURING ONLY A FRACTION OF THE POTENTIAL VALUE OF DATA AND ANALYTICS
So it was great to see Marks & Spencer (UK retailer) launching the first Data Academy for retail, upskilling 1,000 staff as part of its data skills initiative.
Steve Rowe, chief executive of Marks & Spencer said:
“Transformation of our business is key to survival and a huge part of this lies with our colleagues,”
“We need to change their digital behaviours, mindsets and our culture to make the business fit for the digital age..”
What we’re witnessing is the rise in the data haves and the data have-nots, not just acquiring and reporting on data, but the empowering of staff, letting them ask questions of the data in order to move at pace, create better and more fluid ‘experiences’ for customers, new business models exposed by data, and enabling them to drive limited resources to the right areas of the business in order to change and grow.
Note how Steve Row mentions “…digital behaviours, mindsets and our culture…”
Mindset. This is a key differentiator, he’s not saying it’s a tech led initiative and it’s not just having the data, it’s about the people and their attitude and aptitude toward data.
Data architecture has been consistently identified by CXOs as a top challenge to preparing for digitising business as was stated in McKinsey’s Why you need a digital data architecture to build a sustainable digital business
“Leveraging our experience across industries, we have consistently found that the difference between companies that use data effectively and those that do not translates to a 1 percent margin improvement for leaders. In the apparel sector, for instance, data-driven companies have doubled their EBIT margin as compared to their more traditional peers.”
“Using data effectively requires the right data architecture, built on a foundation of business requirements. However, most companies take a technology-first approach, building major platforms while focusing too little on killer use cases. Many businesses, seeing digital opportunities (and digital competition) in their sectors, rush to invest without a considered, holistic data strategy.”
Maybe using data effectively is as much about the breadth and depth of how it’s utilised by people across the organisation, especially as machine learning and AI accelerate.
Which segways nicely into data strategy…
No action without insight.
An HBR post entitled What’s your data strategy provided some insights into what’s typically missing when organisations consider data. They said:
“Cross-industry studies show that on average, less than half of an organization’s structured data is actively used in making decisions—and less than 1% of its unstructured data is analyzed or used at all.”
“More than 70% of employees have access to data they should not, and 80% of analysts’ time is spent simply discovering and preparing data”.
They break down what they term as The Elements of Data Strategy into two parts; Defense and Offense. A company will migrate across the spectrum of Defense and Offense dependent on things such as the company’s overall strategy, its regulatory environment, the data capabilities of its competitors, the maturity of its data-management practices, and the size of its data budget.
I’d also add that it should also look at the capability and empowerment of it’s staff in this regard, after all having the tools is one thing but knowing how to use them and the questions needed before deploying them has to be key. Critical thinking from a data perspective if you like.
Data is cheap, strategy still matters. So does education.
Data ‘Mindset’ at the heart of your business
To most people data is boring, cold, clinical and at times intrusive, but if you embed a culture of ‘data first’ as we have to date with ‘digital first’ how might that change your business?
What if your staff already know what data is important and naturally or instinctively use it in the right way, then data surely becomes the beating heart of your organisation. Action the data in a fluid way not just report on it, flip the 80% discovering and preparing into ‘doing’, ‘learning’ and ‘doing’ …rinse and repeat.
If you’re running innovation or business model workshops in your organisation and looking for a canvas to help you put data at the centre take a look at our canvas at Crank. Email me if you want to know more about how it’s used.
You can read more about data and business agility in the book.