Why can’t everyone create a competitive advantage out of data?
A little while ago I asked myself the question: Why is it that some organisations have the ability and agility to turn data into a competitive advantage and others don’t? The clever folks at Forbes and EY have already researched this topic and found that only 45% of senior executives leveraged data analytics when making decisions or formulating business strategy. Of those that do use data consistently, 75% reported the highest revenue growth.
It’s quite obvious that data is a basic business asset, it’s free and readily available, yet very few of us use it to create a competitive advantage. Why is that?
Over the last decade or so, the digital revolution has changed pretty much everything in business. It’s democratised data and new platforms emerged allowing us to process huge amounts of data. Netflix and Disney (to name the obvious suspects) have ably demonstrated to us how harnessing data correctly creates a massive competitive advantage. ‘Us’ meaning the business leaders still battling with incumbent systems that don’t talk to each other, and a workforce/leadership that entered the world of work before big data was a thing.
If process efficiency was the fuel in the age of manufacturing, data literacy and culture is the fuel of the digital economy. Michael Porter’s value chain was published in 1985 and transformed the thinking of entire industries. However, only few businesses today have recognised the need and the opportunity to look to data for the same transformative powers. Of those businesses that have, they focused on data culture.
Why does data culture matter that much?
The commonly accepted definition of culture is “It’s how we do things around here.” Hence the answer to the question of how to create a more data-driven business is such an obvious one: Focus on culture! How do leaders make decisions? What efficiencies will make your business grow? What customer segments should your sales team go after? The answer to all of those questions are buried in the data you already have and the data will confess! What your business probably lacks is the right people, tools and habits to generate the insights that will unlock growth.
Measure Data Maturity
You can’t manage what you can’t measure. Your journey to becoming a more data-driven business needs to start with a clear understanding of your talent’s strengths and weaknesses, the processes you use, the tools you have and the habits that shape your daily business.