We talked last year about why the time was right to develop a data strategy. We highlighted the fact that most organisations are not yet seeing the benefits of their data investments. Now we want to share some practical guidance on how to develop a data strategy that delivers real business value.
The essential starting point
To be honest there is only one place to start and that is with the business strategy and priorities. Everything that we do with data must be clearly aligned with the needs of the business. Most will have short medium and long term business objectives in place – which is exactly what is needed in a data strategy.
By focusing on the business priorities the data leader will immediately need to open a dialogue with the leaders of the business. In this way we can avoid the danger of creating a Data Cult rather than a Data Culture. Too often we see data teams and their leaders isolated from the mainstream business, regarded as outsiders, even as a threat to current employees and working practices.
To be clear. Before a single word is written about the data strategy it is vital that you have a strong understanding of the business context.
In developing this dialogue you should always be looking to bring the leadership team and CEO on-board with the possibilities enabled by a data driven approach. After all no business transformation has ever succeeded without the full support of the CEO and leadership team.
It is hard to imagine any business priorities or objectives that a data driven approach cannot support – including Finance, HR, NPD/Innovation, Sales and Marketing, and of course today’s key priority for many organisations – sustainability objectives.
In fact sustainability has been described as the new digital by the World Economic Forum – and there can be little doubt that they are the two biggest drivers of change across markets and industries today.
So, what is a Data Strategy?
A great definition of a data strategy comes from the Centre for Information Systems Research (CISR) at MIT, they could not be clearer about the relationship between data and the business –
‘A central, integrated, concept that articulates how data will enable and inspire the business strategy’
An alternative definition comes from leading management thinker Michael Porter, extending from his understanding of business strategy (focused on unique value creation) he defines a data strategy as –
‘A question of capturing and using data, across a system of activities, in a way that your competitors cannot’
Which many people might find a bit challenging or intimidating, but if we set it in the context of Porter’s thinking on business strategy – a question of creating unique value in a unique way – then we may be well served by interpreting it as a question of authenticity. Every organisation and business has a unique history, culture and identity. A bespoke data strategy should be an authentic data strategy – grounded firmly in the business context and priorities.
If we attempt to put the two definitions together we might end up with something like –
‘a data strategy is a central, integrated concept that enables and inspires the business strategy in a unique and authentic way’
From which we might reflect that there is rarely anything unique about a business strategy or set of business priorities, and that the key to differentiation in today’s global markets is the effective (and authentic) use of data, something at least partly seen in the current vogue for Customer Experience.
The Next Step
Having immersed ourselves in the business context and strategy and having held positive discussions with the CEO and leadership team, we are now in a position to think about your vision for data. Again this must be a bespoke vision grounded in the history and reality of the individual organisation.
You should recognise that the Data Vision will become the preface to, and external face of, your data strategy. In practice your entire data strategy is likely to be judged on the credibility of this opening vision. Make it too utopian, too radical, too abstract and you are highly likely to lose your audience and the internal support that is vital to success.
With a draft Data Vision in place you should now engage the CEO and the leadership team with this output. Business leaders should be able to clearly recognise the value of their input, whilst appreciating the necessary translation to a data narrative. The Data Vision should encompass infrastructure, culture and (business) opportunity.
In dialogue with the business leaders you should also start to map out what success would look like in business terms and how you will measure the success of the vision and resulting strategy.
From Vision to Strategy
With a compelling data vision agreed, approved, and in the bank, we now have a clear rationale and purpose for our data strategy. For example –
“This Data Strategy provides the foundation for achieving our vision for data. It defines the relationships between data and the business context in which we operate, the outcomes we aim to achieve from successful implementation of the strategy, and the capabilities and culture we need to develop to realise these outcomes”
Before we go further, and especially for a first time data strategy, it is critical that your CEO and the full Leadership team or Board is fully behind and committed to the approach. This needs to be more than lip-service, you need your leaders to walk the data walk, to change their approach where necessary, to allow data to drive decision making at all levels.
In some organisations and with some leaders this may require some difficult conversations. Many of today’s business leaders are not as au fait with statistics and data as they could be, they may feel threatened by the rise of this new way of working, and they may be embarrassed to admit that they don’t have certain skills.
Rest assured there are solutions available including through the soon-to-launch Profusion Data Academy, Leadership programme, which provides a 9 week immersion into the world of data specifically designed for business leaders.
If you are able to successfully navigate the three steps outlined here; full business immersion, a compelling Data Vision, and appropriate upskilling for business leaders, you will have laid fantastic foundations for future success.
Next time we will move forward with the next steps in the development of an effective data strategy.