Data, analytics and Leadership : Big Data - Big Choices for Leaders

I was asked to talk at the President’s Lecture in London of the Chartered Management Institute recently, on the business and organizational change implications of “Big Data“.

Here's a summary.

There seem to be two fundamental strategies to make full use of the insight from “Big Data” and turn it into practical action and effective business decisions. These are Customer Centricity and Innovation Networks.

1. Customer and client interactions are all moving from “push” strategies to “pull” (Hagel, Siegel). Instead of businesses “pushing” services and products at customers, the individual can now discriminate and “pull” services to them - to suit their exact needs, preferences and timing.

“Big Data” makes this possible. Individuals can view recommendations from other customers, access products, services, resources and media that they need, and optimize how and when it is all delivered and how it is subsequently used. In other words, customers “pull” and personalise everything rather accept things being “pushed” at them.

Customer centricity is about meeting customer needs, and using data-driven insights to build effective customer programs and offers. This means a move in peoples mind set, enterprise strategy and detailed execution. The business must embrace data driven decisions and use a common customer language to connect things up.

2. Innovation Networks are the second strategy that allows business to take maximum advantage of “Big Data” and associated technologies, to speed up the flow of new ideas, products and services.

An objective look at the business’ approach to innovation is essential. Often innovation is focused internally, yet ideas can come from anywhere - suppliers, customers, universities and even government.  

Leaders thus need to embrace new technologies, vast data sets and operational processes that dramatically open up innovation via open networks. They must proactively build networks of internal and external resources, with dynamic structures that change the way the organisation innovates.

One point needing clarity, though, is the definition of “Big Data” itself.

There isn’t one that proves completely satisfactory, as most address the technology aspects and challenges and ignore the organizational implications.    

So I offer this

“Big Data” is

  • complex: comes from multiple sources - structured databases and unstructured social
  • analysableit must be captured, processed, analysed & visualised
  • useful: insight must create decisive action
  • pervasive: it impacts everyone - changes everything in the organization’s processes

To look at this another way:

Tiny Data + Unstructured Data = Big Data

Tiny Data means data from a single source in a structured format which, whilst it may in a huge quantity, is actually limited in its complexity.

Unstructured Data means exactly that - no fixed database format or coherent structure. Think of messages sent on Twitter, images uploaded to the web, Facebook posts and likes, phone calls, customer service calls and so on.

“Big Data” combines the two. Only now are technologies becoming available to combine and make sense of these different sources - and most importantly turn the analytical results into useful insight and action plans.

Consider the example of looking at someone’s Facebook timeline, and noting that they tend to like wearing blue but never orange. If you are a clothing manufacturer, and knew that fact, wouldn’t that help you make more appropriate offers to that potential customer? And if you could match this insight against the customer’s purchase records over time, wouldn’t that give a richer insight into their behaviour?

In a discussion with Chris Meyer, we noted that Big Data and its application would increasingly allow us to automate processes (and even decision systems) in organisations.

Today, the leader is effectively the pilot of an organization, steering it in a certain direction, and making changes as needed. The pilot drives the decision processes.

But in the world of Big Data, what’s the role of the pilot when decision processes are automated?  

From changing strategies, decision processes and self-definition, there are massive challenges to the Leadership role in the era of Big Data.  

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