Data and analytics
represent the most uneven playing field in business. Newer online start-ups,
often founded by data scientists, are built with customer data already embedded
throughout and run a continuous improvement cycle using customer and operational
data to seek cost reduction and profit enhancement opportunities.
Constantly running tests and experiments
designed to generate yet more data (showing different customers ever so slightly different Web pages to see which
one generates more clicks, for example), these analysis-rich businesses operate on a ‘champion/challenger’ basis
where each part of the operation is constantly challenged to find a
better or more efficient variant, which then becomes the new standard practice.
As well as chasing these continuous
improvement opportunities, these businesses will use data analytics to ask
bigger questions too—looking for new products and services to launch, or new
customer pain points in adjacent industries that they can profitably solve.
The leadership team in these businesses
is well used to this data driven change. The business is always evolving, and
even the most traditional and operational teams take pride in their
understanding of analytics and the core Information Technology (IT) systems are
modern and engineered from the ground up to allow tests and experiments and to
then, that the rest of us find this so terrifying.
The established business that these
digital upstarts are competing with could not look more different. Burdened
with last-generation inflexible IT systems, led by middle and senior leaders
with little experience of data analytics and selling most products through
anonymous transactions that generate precious little customer data to analyse
These established businesses make most
of their key decisions the way they always have. Decisions about opening new
stores, or which products to buy and sell, or how to price products and when to
go on promotion are made, though done with some spreadsheets of numbers, but essentially using instinct and the organisation’s
memory of what has worked in the past.
If that depressing description sounds
familiar, then take comfort from the fact that there is an alternative vision
of the future for your business. The
reality is that it does not have to be that way. There are many terrific
examples around the world of big consumer businesses transforming themselves
and their data analytics capabilities. Indeed, many of the pioneers of
loyalty programmes, mass personalisation of customer communication, and
machine-generated micro-segments of customers have been long established retail
and technology brands.
What does it take for your business to
join their ranks, embrace data-centricity, and take the upstarts on at their
It takes a leadership team familiar with
what data can do, comfortable with the kind of questions that analysis can help
with and excited about the changes to the business that might come about as a
In other words, what separates businesses
that really embrace the power of data from those who don’t is not technology,
mathematical skills, or even the ability to hire great data scientists. What
really marks out those who make it are the culture, values, and attitudes of
the leadership team. Fear of change, the rejection of the new, and the
reluctance to go on the personal development journey that data centricity
requires of established business leaders are all potentially fatal.
Becoming a data centric business will
mean challenging all of that. It will mean embracing change at every level in the business and across every function.
Everything from the obvious changes in technology infrastructure to far more
subtle changes in financial evaluation processes and HR training programmes will
need to be reinvented.
And yes, along the way you’ll need to
build some data science capabilities, gather some data, ask some ambitious
questions of that data, and leap into action based on the answers to those
alternative does not bear thinking about. But the prize on offer for businesses
that really put data at their heart, build their brands around customer
lifetime value, and become change-leaders in their sectors can be huge.
Shepherd is a CEO and CMO who has held senior roles in a range of world-class
consumer brands over the last 25 years including Sky, Vodafone, Game, and
Odeon. Ian has launched loyalty programmes, built new digital revenue streams
for traditional retailers, and turned declining market share into stellar
growth—all based on a keen practical understanding of the consumer and of the
power of data and customer insight.
Get your copy of Mr Shepherd’s book The Average is Always Wrong.