Why it is key for leaders to infuse data and analytics into organizations
Data and analytics are proving more important to companies’ strategies than ever before, according to a survey by Harvard Business Review Analytic Services. However, many organizations still fall short of achieving their analytics goals, owing to a skills gap and issues with data access and usage. That’s because almost 75% of organizations don’t have a leadership that completely backs a data-driven culture or nurtures and supports analytics-led innovation. Alarmingly, 24% of respondents say their company culture tends to limit access to information, and 20% think that organizational structure impedes use of analyzed data.
That figure just hints at part of the problem: 19% of those surveyed blame a lack of leadership prioritization, and 11% say that the failure of previous data projects has led to disillusion and disinvestment in data and analytics. The end result of these combined issues is that 74% of companies experience leadership or cultural reluctance to use data and analytics to their fullest.
Senior executives are failing to lead by example and embrace data and analytics. In turn, their teams have failed to adopt data-led approaches to their work, neglecting intelligence that could provide beneficial strategic insights and missing opportunities to drive growth, increase revenue, and evolve their businesses.
We asked some of our experts what leaders should do to put this right. Read on to find out why execs of all kinds must be data evangelists.
Execs driving evolution: Infusing data across the entire organization
To maximize the benefits of data and analytics for any organization, our experts agree that business leaders must foster a cultural shift in their companies. Thinking differently and encouraging new habits throughout a business starts at the top.
Achieving this requires them to develop a vision around being an intelligence-led company. Execs should support the education of colleagues and advocate an organizational culture that adopts the use of analytics as more than just a best practice. They need to adopt technological solutions that infuse analytics into every process, product, and service.
“First and foremost, it’s an issue of C-suite leadership,” observes Guy Levy-Yurista, former Sisense Chief Strategy Officer. He explains: “Typically, they don’t concern themselves with data and analytics. It’s something they prefer to outsource to data specialists. This has to change if they want their businesses to survive. For an organization to become data-driven, the culture needs to change, and that change must be led by those at the top. The C-suite must embrace, and be seen to embrace, data and analytics. When the top leads, the rest will follow.”
Envisioning a data-focused company
Guy calls for companies to build a two- or three-year cohesive strategy that inculcates the use of data and analytics throughout the organization. He says, “Every company must have an embedded data strategy that takes into account the working practices and all of the data needs of every division.”
This involves taking a fresh approach to data in order to get better results.
“Data-driven culture doesn’t mean ‘bring charts to meetings’ or ‘make decisions with numbers,’” explains Scott Castle, Sisense’s VP and General Manager, Internal Analytics. “It means implementing a hypothesis-driven culture. Identify theories, test them, rigorously seek to disprove them while rapidly implementing those that show promise. Make decisions with evidence. Don’t let your team search out favorable statistics. Encourage them to look at the complete data picture and come to conclusions based on the preponderance of the evidence.”
To this end, Charles Holive, Managing Director of Sisense’s Strategy Consulting Business, calls for the appointment of a chief data officer in every leadership team to be the main advocate for data-driven working practices, and he says they should have revenue targets. He concludes: “This is not an initiative. It’s a way forward, a mandatory muscle for all companies to develop by infusing analytics in everything they do internally and externally, to overall increase returns on investments for their companies and their customers.”
Analytics success stories: Companies infusing analytics to win their industries
Smarte Carte has done an excellent job of bringing all of its data together and putting it into the hands of its field team, so everyone is working with near real-time data from their mobile devices. This helps ensure better forecasting, reduces product/kiosk downtime, and ensures that its people have the answers they need when and where they need them.
Another huge example of a company leading with data is Amazon: The Seattle tech giant is an extremely data-driven company, with customer service at its core. Amazon measures the effectiveness of almost everything it does, including innovation. Guy observes that Amazon gives employees license to innovate almost at will. (Indeed, it’s an unofficial motto around the “Everything Store” that employees should innovate their own jobs away.)
It’s becoming increasingly important to try to measure innovation with data. Providing it can, and providing the numbers show a benefit, the innovation becomes regular operating procedure. With this in mind, Guy recommends embracing innovation as a critical driver of success.
“Innovation can be inexact and inefficient, often by design,” says Guy. “So, any company needs to create a team and allocate a budget that’s dedicated to innovation and that has the latitude to examine data further, stretch parameters, and explore whether there are new possibilities out there.”
Pressure drives evolution: Companies transforming under COVID-19
The coronavirus pandemic forced companies to think differently and improve their agility. Innovation became critical for nearly every business. Scott describes it as “a perfect example of a sudden market change that required every business to reconsider its fundamental assumptions.”
Some companies, like those in air travel and hospitality, saw demand for their products almost completely disappear overnight, and others, like Zoom and grocery stores, saw it scale unexpectedly. They all required quick responses to adjust to, capitalize upon, or even simply survive in the new reality. Recall the supply chain problems that paralyzed supermarkets in April 2020: Organizations faced with totally new market dynamics needed to test new hypotheses and run experiments quickly — and those that did, using data and analytics, survived and thrived.
The pandemic brought a new focus to data and its timeliness because conditions could change daily; a dashboard being updated once a week or month was no longer acceptable. The customer experience changed as well, almost overnight, and will only continue to evolve.
Taking a macro view, Charles observes that, “Many markets got to be reset through the pandemic … giving an opportunity to large, small, and new players to reinvent themselves and tackle the market from a redefined environment. It’s been surprising to me to see how fast companies, doing it through the value and data-driven approach, went on to win more.”
Lead with change, or change leaders
The consensus is clear — organizations can’t stand still. To flourish, they must be led using actionable intelligence, derived from data and analytics. They must infuse analytics into their practices, their products, their services, and even alter their organization’s DNA if necessary, to become modern businesses.
To do that, they need their leaders to become evangelists for analytics. They must expedite the infusion of analytics everywhere and enable everyone to use actionable intelligence. The choice is stark for the leaders of every business: Do this for your organization to survive and thrive, or die.
Author: Adam Murray