You also know that there is a gold mine of data just waiting to be mined throughout the organisation. You probably also know that it is important to get the people on board with these new ways of working. But do you know HOW? This is where it begins to become really challenging to most people, but maybe it does not have to be so complicated or painful to realise the value of your data.
I would claim that the primary challenge as an executive is to realise that a successful, data-driven business model is a balancing act. Focus on data insight should be constantly balanced with the ability to implement change. In other words, people management skills such as change leadership capabilities and empathy are just as necessary for a successful data-driven business model as the right systems and technical competences.
However, I find that most companies still have a limited focus on the element of change. An increasing number of companies invest in big data, but most are still in the first stages of their analytics journey and invest heavily in analytics systems and experts. However, it is important to acknowledge that your work is not done simply because you have hired the best data analysts out there. You also need to integrate their roles and work in the organisation and make sure that there are strong communication lines between them and the employees waiting to make decisions based on the data.
At the end of the day, the value you get from data is only as good as the decisions you make. This is why the data analysts should be fully integrated in your organisation to enable them to acquire the necessary understanding of the current issues in the business. But this requires that the business is open to challenging accepted truths with new data insight. I find that while we tend to focus a lot on the ‘journey’ from data to insight, many executives overlook the significance of the journey from data insight to implemented value.
Change leadership is key
My point is that many executives are well aware that the journey to become a data-driven organisation and working with analytics is a change process like any other, but that they underestimate the need for change leadership. And if the change is to be successful, it is necessary to work with change leadership and on changing the mindset of the employees, not just their work methods. As Tomas Chamorro-Premuzic put it in Harvard Business Review (October 2018): “[…] becoming a data-driven organization, it’s an ambitious goal for any company, requiring a big cultural transformation, which will need to transcend the wishes of senior leaders to create real changes in how people think, feel, and act at all levels of the organization.”
A lot of employees have to work efficiently together on this journey. And our task as CxOs is to pave the road for them. Most successful organisations have a functional focus, a geographical focus or a market focus. This means that the company structure is basically designed to counteract analyses and cooperation across the value chain. But if the company is to realise the value of the data, that the decision makers, the BI experts and analysts have to be able to work together with the business across these “boundaries”. As CxO, your executive team is the only team with the span of control to make this happen. So maybe start to think about how you can make employees come together in your organisation.
It is your job as the executive to create a culture where it is okay to experiment and to fail. You need to create a culture that promotes learning and curiosity and that cannot be achieved if organisational and individual KPIs do not provide incentives for spotting new business opportunities or ways of working with data. Let employees explore new tools. Provide them with training. Enable friendly, internal competition. Allow employees to fail cheap and fast. This form of culture will build confidence and motivation for new ways of working. And respect that this is a huge and scary change, like moving from the calculator to Excel. Changes of this scale take time.
A common concern among employees is often that their role will become redundant. In most cases, this is not the case, and it is your job to reassure your employees. It is also important to emphasise that new ways of working with new technologies will mean new roles and new areas of responsibility that everyone will have to take part in. Your employees may not be replaced by data analysts or AI, but they will have to be able to cooperate closely with the data analysts and the output they receive from them.
It is your job to make your employees realise that analytics will help them make better and more efficient decisions based on a stronger basis for decision-making, all thanks to the insights provided by analytics.
Larger does not always mean better
Another part of the executive job is to keep an eye on the bottom line, but do not worry. If you do your part right in leading the change, the value realisation will more than make up for the costs of any missteps along the way. I always recommend executives to take baby steps on their data-driven journey, such as trying out new tools, systems and processes on a small scale. This also enables a sense of confidence among employees and can help create motivation for trying out even more new things. This motivation is often lacking if everything is turned upside down at once, which can also be a very costly solution in the end.
Originally published in Børsen Ledelse