Your Data is Speaking. But are you Listening?
Earlier in my career, I worked for a several billion dollar company. The company was filled with smart people that liked to have big fun. But the company was also built upon a vision of the market opportunity from an earlier corporate leader. Clearly, this leader’s vision could only last so long. Unfortunately, at this critical juncture, this company’s leaders acted as they were all knowing. I remember meeting with the Vice President of Marketing, an MBA graduate from a top tier school, about a number of rather obvious business threats. I was amazed when he said that he was not worried and had reasons for discounting them all. This company, before it was sold a couple years ago, had its earnings drop by a whopping 98%. How could this happen? I believe that the leaders of this organization failed to listen to the data that was speaking to them.
Great leaders hear what the data is saying
In contrast to being all knowing, I believe that great leaders are obsessed with data. They believe the data can tell them the state of their business, better than gut feel or intuition. They feel a constant personal need to get better, more timely, more complete data and as important to understand what the data collected means. There are lots of great examples of great leaders with a strong data orientation but I really like the approach of Brian Cornell, the new CEO of Target. He has driven the use of data at every organization that he has worked for but as important he has personally drives for an objective understanding of what the data collected means through a mix of informal and formal focus groups. Put simply, being objective means that you don’t know what the data means a priori or pick and choose through the data for data that supports a predetermined point of view. This means that numbers by themselves are not good enough for leaders that are data obsessed. These leaders want to know what the number’s means and what actions are warranted based upon the numbers instead holding onto a personal belief or agenda. For this reason, they look for opportunities to ask questions of key enterprises relationships—especially customers. They ask questions of customers like why are the numbers saying this? Why do feel this way? How can we service you better? What products are we not providing you that you need? And the list goes on and on.
Great leaders also use data to manage better
I want to suggest that great leaders also use data to manage their organizations better. And as important that they do this for each of the four functions of management. In contrast to their peers, they do not just use data for controlling. They use data in their decisions around planning, organizing, and leading too. Let’s take a look at just how this works.
During the planning, leaders should use data to better understand the current organizational situation. Where are we succeeding? Where are we not succeeding? Where is our current corporate business definition working or requiring change? Where is digital transformation changing the basis of competition and possibly requiring new business capabilities? Additionally, leaders may request qualitative and quantitative data for existing and planned new products. How big is the market? What features do different segments want? And the list goes on and on. The important thing is they let the data speak to them and hear what it means to them and their business. For some, they may need as my previous employer to have invested in new businesses that could be built upon where they started and then in time replaced their historical business franchise.
Clearly, the organize function is about distributing resources, organizing employees, and delegating authority. I want to suggest that how well you do these should be based upon data too. Do we ever determine how you are going to organize from previous success or lack of success? Who should take on which tasks? Do you have data and insights to drive these decisions? In annual planning, are there perennial sand baggers? Additionally, is there effectiveness data that should cause you to reorganize how organizations are constructed? Are organizations typically underperforming other functions? Are their issues that can be resolved with new or better yet remediated leaders?
Leading involves the use of influence to motivate employees to achieve organizational goals. For this function to be effective, leaders need to convince their team to work toward the corporate or departmental plans. In particular, leaders must be able to make employees want to participate in achieving an organization’s goals. Doing this involves motivating employees, influencing employees, and forming effective employee teams. Clearly, much of data orientation here really occurred in the organizing of activities and later in measuring performance in controlling. Leading is, therefore, focused a explaining the goals to the organization and getting organizational buy-in for those goals and the activities needed to achieve them. It is also about grouping employees together as individual contributors. Clearly, data can be used to help drive a more effective team or organizational design.
Controlling involves making sure employees’ activities deliver the organization its targets goals. It also involves making necessary corrections including for the activities. Controlling, in particular, ensures that, through effective leading, what has been planned and organized takes place when it is expected. Beyond establishing a control system, leaders need to evaluate and reward employee performance and control financial, informational, and physical resources. Controlling should be an ongoing process and more important, be measured against continual improvement objectives too. An effective controlling function determines whether the organization is on target toward its goals and makes corrections as necessary. It does this by continually receiving performance data.
In the past only a small portion of controlling could happen in period, but this has changed. Making decisions in the past was from a mix of backward facing data and forward facing gut feeling. This is no longer acceptable. Today, data needs to be real time, clean, and consistent. As Derek Abell attested to many years ago—“control is different than reporting in that it implies the possibility of management intervention” (Derek Abell, Managing Dual Strategies, pg. 274).
Today’s great leaders are leaders are data obsessed. They know intuitively that if they aren’t this way then their organizations survival may be at risk. They drive their management from the data and by testing what the data means. As well, they use data to run and build better organizations. Regardless of function, they let the data speak to them instead of allow subjective bias to skew their interpretation.