As seen in InformationWeek
Competing in today’s data-intensive business environment requires unprecedented organizational agility and the ability to drive value from data. Although businesses have allocated significant resources to collecting and storing data, their abilities to analyze it, act upon it, and use it to unlock new opportunities are often stifled by cultural impediments.
While the need to update technology may be obvious, it may be less obvious that corporate cultures must also adapt to changing times. The necessary adjustments to business values, business practices, and leadership strategies can be uncomfortable and difficult to manage, especially when they conflict with the way the company operated in the past.
If your organization isn’t realizing the kind of value from its big data and analytics investments that it should be, the problem may have little to do with technology. Even with the most effective technologies in place, it’s possible to limit the value they provide by clinging to old habits.
Here are five ways that cultural issues can negatively affect data innovation:
1. The Vision And Culture Are At Odds
Data-driven aspirations and “business as usual” may well be at odds. What served a company well up to a certain point may not serve the company well going forward.
“You need to serve the customer as quickly as possible, and that may conflict with the way you measured labor efficiencies or productivity in the past,” explained Ken Gilbert, director of business analytics at the University of Tennessee Office of Research and Economic Development, in an interview with InformationWeek.
[ What matters more: Technology or people? Read Technology Is A Human Endeavor. ]
Companies able to realize the most benefit from their data are aligning their visions, corporate mindsets, performance measurement, and incentives to effect widespread cultural change. They are also more transparent than similar organizations, meaning that a wide range of personnel has visibility into the same data, and data is commonly shared among departments, or even across the entire enterprise.
“Transparency doesn’t come naturally,” Gilbert said. “Companies don’t tend to share information as much as they should.”
Encouraging exploration is also key. Companies that give data access to more executives, managers, and employees than they did in the past have to also remove limits that may be driven by old habits. For example, some businesses discourage employees from exploring the data and sharing their original observations.
2. Managers Need Analytics Training
Companies that are training their employees in ways to use analytical tools may not be reaching managers and executives who choose not to participate because they are busy or consider themselves exempt. In the most highly competitive companies, executives, managers, and employees are expected to be — or become — data savvy.
Getting the most from BI and big data analytics means understanding what the technology can do, and how it can be used to best achieve the desired business outcomes. There are many executive programs that teach business leaders how to compete with business analytics and big data, including the Harvard Business School Executive Education program.
3. Expectations Are Inconsistent
This problem is not always obvious. While it’s clear the value of BI and big data analytics is compromised when the systems are underutilized, less obvious are inconsistent expectations about how people within the organization should use data.
“Some businesses say they’re data-driven, but they’re not actually acting on that. People respond to what they see rather than what they hear,” said Gilbert. “The big picture should be made clear to everybody — including how you intend to grow the business and how analytics fits into the overall strategy.”
4. Fiefdoms Restrict Data Sharing
BI and analytics have moved out from the C-suite, marketing, and manufacturing to encompass more departments, but not all organizations are taking advantage of the intelligence that can be derived from cross-functional data sharing. An Economist Intelligence Unit survey of 530 executives around the world revealed that information-sharing issues represented the biggest obstacle to becoming a data-driven organization.
“Some organizations supply data on a need-to-know basis. There’s a belief that somebody in another area doesn’t need to know how my area is performing when they really do,” Gilbert said. “If you want to use data as the engine of business growth, you have to integrate data from internal and external sources across lines, across corporate boundaries.”
5. Little-Picture Implementations
Data is commonly used to improve the efficiency or control the costs of a particular business function. However, individual departmental goals may not align with the strategic goal of the organization, which is typically to increase revenue, Gilbert said.
“If the company can understand what the customer values, and build operational systems to better deliver, that is the company that’s going to win. If the company is being managed in pieces, you may save a dime in one department that costs the company a dollar in revenue.”