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It may sound obvious—perhaps even a little trite—to say that leadership is a critical success factor for an organization’s analytics initiative. However, it needs to be highlighted because so many analytics initiatives fail to meet expectations despite enormous investments being made to support their success. In fact, a recent article from the Harvard Business Review showed that fewer than half of analytics programs in their research study met their initial return-on-investment (ROI) goals. It is eerily reminiscent of the CRM craze in the late 1990s and early 2000s when, despite the billions of dollars spent on platforms and people, research firms such as Gartner estimated that 50 percent to 80 percent of these implementations failed.
Why is executive leadership in particular so crucial to successful analytics initiatives? The simple answer is that applying data and analytics to operations is disruptive. And when there is disruption within an organization, only strong leadership backed by sound strategy can help keep all stakeholders aligned around a common purpose.
Since the 2011 release of McKinsey and Company’s landmark report, “Big data: The next frontier for innovation, competition, and productivity,” organizations around the globe have sought to capitalize on this newly discovered asset. It is generally agreed that harnessing data (big and small) to reveal deeper consumer insights holds enormous potential for gains across an organization’s enterprise: marketers can create more targeted, relevant campaigns; customer service and support centres can deliver superior experiences through consumers’ preferred channels; product development can tap into real-time data and analytics to tailor products for key audiences and geographies; and so on.
Yet data and analytics can also force change in companies. The same insight that holds the promise of competitive advantage may also challenge the status quo. Decision makers may need to think differently as they face new realities, challenges and opportunities revealed by a thorough analysis of what customers are buying, doing and saying, especially online, about a company’s offerings. And while data-based insights offer the exciting potential for innovation and optimization across organizations, barriers like silos and departmental norms can quash those prospects. Changing mindsets and organizational practices require effective management if the advantages that data and analytics offer are to be realized.
Some key elements for leaders to consider when implementing an analytics initiative:
- Transforming an organization into a data-driven enterprise is a significant undertaking. It requires both C-level leadership and C-suite mindshare to ensure the effort gets the priority it deserves. The roles of Chief Analytics Officer and Chief Data Officer are increasingly common positions designated to drive data- and analytics-related programs throughout the enterprise.
- When implementing a corporate data and analytics initiative, and appointing a C-level executive to lead it, CEOs must be aware of the impact of this change on other members of the C-suite. A newly appointed designate invested with significant influence will be disruptive to others on the senior leadership team who may feel their own impact has been diminished. The CEO must proactively manage this tension by aligning the leadership team around the vision and journey ahead.
- Analytics success requires a sound strategy. This means an organization needs to develop a strategy that is not only central to its overarching business priorities but also clearly and consistently articulated to (and understood by) all stakeholders in an intentional effort to eliminate departmental silos. Clear definitions of the intended value generated by data and analytics need to be core elements of this plan.
- With the oversight of a C-level leader, a cross-functional and agile analytics team is required to translate the strategy into effective tactics at the business unit level. The team composition needs to be multi-disciplinary in order to effectively connect the more technical aspects of data management and analytical processes with business strategy—and to avoid “broken telephone” scenarios.
- To move from theory to practice and tangible results, organizations must incorporate data and analytics into their decision-making and operations. This evolution cannot be an afterthought or peripheral exercise but a strategic intent to be “data driven” and use data and analytics to help address competitive challenges. Performance and compensation need to be aligned to these processes accordingly.
- Successes and milestones in the analytical journey need to be celebrated across the enterprise on an ongoing basis. “Storytelling”—anecdotes and examples that vividly illuminate the unique ability of data and analytics to produce quantitative results and improve operations—can reinforce leadership’s vision, strategy and commitment to the initiative. This socialization of success stories can even goad lagging departments and business units to accelerate their adoption of data and analytics.
All these keys to success point to the importance of a strong change management strategy that is also championed at the senior executive level. And the focus must be ongoing because the best data-driven organizations are constantly monitoring, refining and revising their strategy based on what the data are telling them and how their tactics are responding to it. Without strong leadership providing strategic direction, support and advocacy for corporate data initiatives, many could suffer the same ignominious fate of CRM programs. For any C-suite executive, the benefits of data analytics are too significant to allow that to happen.
Evan Wood is senior vice-president of marketing and custom services at Environics Analytics
