The Emergence of the Analytical (Data Ready) CEO
I remember being an A’s fan during the Moneyball era. When my wife and I saw the movie, we kept asking each other do you remember going to this game or that game. Prior to the movie, neither of us knew what was taking place in the A’s back office. All we knew was it was hard not to want to be part of this team with such a low payroll, kids drumming at every game, and irrepressible will to win even though the odds were stacked against them.
CEO leadership is needed to push analytics thinking
Just like what happened during Moneyball, I am increasing finding that analytics do not happen in a vacuum. Leadership is needed to push analytical thinking. There needs to be an orientation to analytics and this needs to come from the top for an enterprise analytics approach to take hold and to grow. Clearly, not all organizations need to have their chief analytics officer reporting directly to the CEO, but there needs to be bias to use data rather than gut feel. And this bias needs to be set at the top of the organization. Otherwise, organizations end up with enterprise fiefdoms of information.
Last week, I was sitting with two IT leaders for a major mutual fund company. I was talking to them about the importance of analytics. While both agreed with me, they said that some managers prefer to use their intuition and experience versus data. Imagine that—the most data centric type of enterprise has managers preferring intuition over data. However, CEOs are starting to act as change agents here. Marc Benioff says, “I think for every company, the revolution in data science will fundamentally change how we run our businesses. Our greatest challenge is making sense out of data. We need a new generation of executives to understand and lead through data”.
Brian Cornell is a great case study
One of the leaders of the analytics vanguard is Brian Cornell. “Analytics have been a central part of Cornell’s approach”. When he headed Sam’s Club, he used analytics to improve the unit’s customer-insight system. The results were so good that Wal-Mart moved all of their analytics teams under Cornell. According to Stuart Aitken, Cornell does not just look at the data. He goes beyond the data and asks hard questions of customers and those on his team. Cornell method involves taking the clues he gathers from customer conversations and using analytics to look for broader patterns that would reveal problems and opportunities.
Cornell’s emphasis on analytics was a key reason why Target board’s hired him. His record with analytics is amazing. This included his ability to use data to expand in house brands and reverse sales declines at each company that he worked for. At Sam’s Club, for example, he made it into the fastest growing division of Wal-Mart. Presently, Cornell is using data and analytics to look for areas where Target can reestablish it’s right to win.
Change moment for CEOs
We are clearly at a change moment for CEOs. In the past, CEOs and their managers relied on backward facing reporting to drive forward facing performance. But today, timely data exists to drive forward facing performance—especially, if the analytics are placed on top of them to show connections and predict near term impacts. Whether it be for the front office or the back office, with great data—data which is trustworthy and timely—it is possible for CEOs and their leadership teams to be the captain of the ship. It is possible with great data and a willingness to dig into what the great data represents to see the business icebergs ahead and to take action not only corrective action, but as well, to make use of the opportunities and trends that they represent. Clearly, with great data, analytical CEOs and their teams can develop strategies that can be the basis for new approaches to winning businesses.
So how can you become the analytical leader that your enterprise needs? To point you in the right direction, here are four practices that will fuel your strategic use of data. The linked research combines the latest research from the Economist Intelligence Unit and a global survey of IT professionals and C-level executives. From this research, the connection between the strategic use of data and financial performance will become absolutely clear.
Author Twitter: @MylesSuer