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Data management


WHY BECOMING A DATA-DRIVEN ORGANIZATION IS SO HARD

Company culture is often a bigger hurdle than any technical problem.
by
 * Randy Bean

by
 * Randy Bean

February 24, 2022
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Summary.    Being data-driven has been a priority for companies for decades —
but many have seen mixed results. Why? According to a new survey of executives,
company culture is a harder hurdle to clear than any technical problem. On top
of that, the continuing explosion of...more
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Companies have been working to become more data-driven for many years at this
point, with mixed results. These efforts play out over time in organizations,
and persistence, resilience, execution, and a relentless drive to employ data to
make more informed business decisions are what distinguishes those companies
that prevail from those who continue to struggle. But while the mission may
remain steady, the particulars change.

Right now, the biggest challenge for organizations working on their data
strategy might not have to do with technology at all. In the latest NewVantage
Partners annual survey, which tracks the progress of corporate data initiatives,
corporate chief data, information, and analytics executives reported that
cultural change is the most critical business imperative. It’s an understandable
problem: to a degree that is perpetually underestimated, becoming data-driven is
about the ability of people and organizations to adapt to change.
Long-established companies, which have been successful over generations or
centuries, are unlikely to change overnight — adoption of the internet through
digital transformation efforts has played out over the course of the past
quarter century. Similarly, the effort by companies to become data-driven
represents a business transformation that is playing out over the course of a
generation. Much has been achieved, yet more remains to be done.

But while this issue isn’t new, there are two cultural dynamics that have shaped
company efforts during the past few years.

First, the Covid-19 pandemic — and the disruptions it caused — raised awareness
of the importance of data, science, and facts. While companies may have paid lip
service to the importance of data before, the case that good data is essential
to making informed, prudent, and judicious business decisions has been made
crystal clear over the past two years.

Second, self-service is on the rise, and individuals now consume information and
data when they want and how they want it. We live during a time of increasingly
decentralized information, which means that consumers can select the news they
follow, the social media they engage with, and the data that they choose to
trust, with the consequence that consumers of information can be subjected to
selective presentation of data to support a wide range of often diverging
viewpoints. At its most extreme, this has given rise to the notion of
“alternative facts.”

Finally, there’s a structural fact: the amount of data that is created each day
continues to proliferate at exponential rates. With greater computing power,
companies can now process massive quantities of data to generate a precise
answer, rather than rely on representative data samples.

Understanding these trends — and how other companies are navigating them — can
help companies make real progress towards their goals of data-driven decision
making.


BARRIERS TO BECOMING DATA-DRIVEN

There are three indicators of progress that stand out among the surveyed
organizations. First, achieving data-driven leadership remains an aspiration for
most organizations — just 26.5% of organizations report having established a
data-driven organization. Second, becoming data-driven requires an
organizational focus on cultural change. In this year’s survey, 91.9% of
executives cite cultural obstacles as the greatest barrier to becoming data
driven. As noted, this is not a technology issue. It is a people challenge.
Lastly, organizations are establishing the leadership function — in the role of
the Chief Data and Analytics Officer — which will provide the foundation for
becoming data-driven. However, just 40.2% of companies report that the role is
successful and well established within their organization.

It doesn’t help that the task of being data-driven keeps getting harder. Today,
corporations encounter vast new volumes of data, as well as new sources of data,
which include sensor data, signals, texts, pictures, and other forms of
unstructured data. It has recently been argued that 80% of all new data is
unstructured, meaning that it is not easily captured or made quantifiable.
Increasingly, companies must come to recognize and appreciate that data is a
business asset that flows through an organization. Data cuts across traditional
organizational boundaries, often without clear ownership. The fluidity of data
compounds the complexity of managing this asset in a way that consistently
delivers business value.

Furthermore, there is one rapidly emerging concern that confronts every business
these days when it comes to the ownership and management of data. That is the
assurance of responsible and ethical data use. This is a topic that has been
written about extensively in recent years and has been the subject of critics
ranging from Cathy O’Neill, in her 2016 manifesto Weapons of Math Destruction:
How Big Data Increases Inequality and Threatens Democracy to Shoshana Zuboff, in
her 2019 call to arms, The Age of Surveillance Capitalism: The Fight for a Human
Future at the New Frontier of Power. Recently published works by Carissa Veliz,
Privacy is Power: How and Why You Should Take Back Control of Your Data (2021),
and Why Privacy Matters (2021) by law professor Neil Richards, dig deeper into
the issues of individual privacy and corporate data responsibility.

This year’s survey mirrors and highlights the depth of corporate concern
regarding data ethics and data responsibility, reflected in the meager 21.6% of
data leaders who state that the industry has done enough to address data and AI
ethics issues and standards.


STEPS COMPANIES CAN TAKE

Becoming a data-driven organization is a journey, which unfolds over time,
measured in years, and sometimes decades. What steps can organizations and
business leaders take to accelerate these efforts? Experience tells us that
data-driven organizations consistently demonstrate qualities that distinguish
them from their contemporaries. Data-driven companies consistently execute on
these three driving principles:

 1. Think different. Data leaders recognize that becoming data-driven requires a
    different mindset. Organizations must be prepared to think differently.
    There is no shortage of analytic algorithms. These need to be matched by
    critical thinking, human judgement, and a view to creative innovation.
 2. Fail fast, learn faster. Data leaders understand that individuals and
    organizations learn through experience, which often entails trial and error.
    It has been said that failure is a foundation of innovation. Companies that
    are prepared for faster iterative learning — fail fast, learn faster — will
    gain insight and knowledge before their competitors.
 3. Focus on the long-term. Data leaders appreciate that the data journey is a
    transformation effort that unfolds over time. Becoming data-driven is a
    process. The French writer Voltaire famously said, “Perfect is the enemy of
    good.” Perfection is rarely achievable. Data-driven companies recognize that
    success is achieved iteratively. It will grow and then spread. Successful
    organizations expect to be at this for a while. They focus on the long-term.

To compete in the increasingly data-driven world of the twenty-first century,
business leaders must learn from the experience of their predecessors. They must
actively work to avoid the pitfalls of the past, and benefit from the example of
those companies that have pushed forward with success. Now more than ever, at a
moment when data, science, and facts have been challenged from many quarters,
becoming a data-driven organization matters.

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Read more on Data management or related topics Technology and analytics,
Analytics and data science and Digital transformation
 * Randy Bean is the author of Fail Fast, Learn Faster: Lessons in Data-Driven
   Leadership in an Age of Disruption, Big Data, and AI. He is a contributor to
   Harvard Business Review, Forbes, and MIT Sloan Management Review, and The
   Wall Street Journal, and is Innovation Fellow, Data Strategy with Paris-based
   Wavestone (EPA: WAVE) and Founder/CEO of NewVantage Partners, acquired by
   Wavestone in December 2021. You can contact Randy Bean at
   rbean@newvantage.com and follow him on LinkedIn.

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Analytics and data science and Digital transformation



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