So Near and Yet So Far—the Data Centricity Challenge
June 1, 2021
Ian Shepherd, author of The Average is Always Wrong, on how difficult shifting your business towards data-centricity can be.
hired some data scientists. You’ve allocated capital to technology projects
with titles like ‘single view of the customer’ and ‘desktop analytics’. You may
even have launched whole new ventures like loyalty schemes or product
subscriptions on the promise that they would deliver lots of rich customer
data into your business.
back of all that activity, you’ve reviewed board packs that conjure with
phrases like ‘big data’, ‘machine learning’, and other buzzwords.
yet, somewhere in the back of your mind is the nagging feeling that none of
that has really moved the profit line appreciably northwards. What are you
you, take some small comfort from the fact that you are in good company. CEOs
of businesses large and small, public and PE owned and across a range of
sectors have all reported the same gnawing worry. But if it isn’t hiring
technical people or funding these new projects which helps businesses turn data
into profit, what is it?
those businesses which are data-driven to the core with those for whom data
science remains an uncomfortable bolt-on reveals three key success (or failure)
factors above and beyond the willingness to invest:
familiarity with what data can do. It’s easier if you are an online startup and have a leadership
team populated with ex-consultants and bankers who live and breathe numbers.
But senior leaders in retail and hospitality businesses, for example, have
often succeeded in becoming senior based on their knowledge of customer needs,
ability to strike strong supplier agreements, and their operational and organisational
skills. They may not, however, have had to extract value from large amounts of
consumer data—and the skills and even the terminology of data science can be
scary and off-putting for them.
Denial. A natural
consequence of that lack of familiarity with data is a kind of corporate
denial. That can take a number of forms, ranging from straightforward “not
invented here” through to the more subtle denial symptom of outsourcing. If we
get some clever consultants in to ‘do the data stuff’ we can carry on running
the ‘proper’ business uninterrupted, after all.
of failure. The
very essence of extracting value from data is asking a lot of questions about
what it is telling you. Setting up hypotheses, building models based on them,
and testing those models against control groups is the core process of data
science. If yours, however, is a business where executives are rewarded only
for association with successful programmes and not for testing things and
proving that they don’t work, then the broad and curious approach to innovation
which characterises really data-centric businesses is unlikely to flourish.
businesses which have succeeded in truly putting customer data at the centre of
their operating models are characterised, then, by a broad management team
familiarity with the topic of data, including ongoing investment in continued
learning on the subject.
leadership teams which are constantly asking questions about their business and
challenging their specialist analysts to answer those questions. Why do people
buy this product more than that one? What could our data tell us about which
products to have in which stores? Can we predict complaints and customer
dissatisfaction before they happen?
finally, they are businesses where every key process, from recruitment through
capital allocation and beyond are organised to encourage experiments, to
generate yet more insight from data and drive further commercial success.
your business to that point is a culture and values transformation as much as
a technology one. It will require open, honest introspection amongst the
current leadership team and a courageous willingness on the part of senior
colleagues to admit what they don’t know and engage on a learning journey
if there is one thing any analysis of the value of data for modern businesses
will reveal—it is that the journey is worth it.
Ian 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
Copyright © 2021 Singapore Institute of Management
Article Found In
Issue 2, 2021