Recently, The Economist dedicated an entire issue to discussing why data is the new oil. We see Big Tech fighting over who gets access to data, as in Apple vs. Facebook. Lawmakers are trying to figure out how to regulate data privacy. Western governments want to form a coalition against China on key areas such as artificial intelligence and data.
Beyond the macro issues, executives should know three aspects about the data their company gathers. Forget about the political implications for now and focus on how your team could use your data over the next 12 months.
Data provide road signs
The first facet data can offer to your team is providing signs on the road. Data on its own isn’t very useful. It first needs to be interpreted, but data can explain how you should proceed.
For example, data can show you your most valuable customer segments and how they have changed over time. It can reveal hidden segments that are incredibly profitable and align well with your current brand.
You could also discover the reasons why customers love your products — not just the obvious, but the deep emotional reasons. You could then use this information within your marketing campaigns.
You still need to drive the car and make decisions where you aren’t sure if this is the right turn. However, data can provide more guidance over time. As your team gets better at consuming data, you will make fewer wrong turns.
Data is rocket fuel
The second facet data can offer is providing fuel for the rocket. High growth companies tend to hit several key gears at just the right time. They have the right product for the right customers at the right time and delivered by the right method.
Data can act as extra fuel for this fast-moving rocket. High growth teams can use data to diagnose broader demographic trends that could affect them and jump on them before being disrupted.
Look at a company like Facebook that proactively bought competitors like Instagram and Whatsapp. At the time, it seemed that Facebook was overpaying for some of these acquisitions. In hindsight, they proved great moves.
The best companies create a feedback loop. They execute correctly on their strategy, gather new data on how they did, and use that data to design even better strategies. We have seen it with Amazon, Costco, Apple, and others.
Data requires a human touch
The third facet to know about data is that it requires a human touch. Technology is making several aspects of data straightforward. Collecting, storing, and even analyzing data is becoming easier by the day.
However, several aspects aren’t becoming easier. Teams can quickly become overwhelmed by all the data. They can lose trust in the numbers they are seeing. Data silos can make political issues worse.
Each of these is a people challenge, and you’ll need to work through them. Don’t assume that just because technology is utilized that people will adopt data. In fact, it takes consistent effort and training to get data into the bloodstream of a company.
The most data-driven companies in the world have spent significant time and resources building data into their day-to-day infrastructure. An entire industry of data enablement has been born to help tackle these challenges.
When it comes to people challenges, think of Jackie Robinson. In 1947, when racial tensions were still strong, the Brooklyn Dodgers hired him as the league’s first black American baseball player. The Dodgers and Jackie faced discrimination from other teams and fans. Yet, in the years that followed, more black players would join the league.
Someone had to go first, and the same applies to getting data adopted within a company. One manager who did this incredibly well started using data within her team, while showing the rest of the company what was possible. She ran educational meetings, talked with other colleagues, and offered help. She was eventually promoted to Head of Data.
Data will continue to make news for its impact on our world. However, in your world or company, keep in mind the three facets above. They will help you get more insights and value out of your data.
* * *
Ruben Ugarte is founder of Practico Analytics, providing expertise in data analytics. He has worked with companies on five continents and in all company stages, helping them to use data to make higher quality decisions, boost performance, increase profitability, and make their teams world-class. He also maintains a popular blog with more than 100,000 readers. His new book is The Data Mirage: Why Companies Fail to Actually Use Their Data (Business Expert Press, January 22, 2021). Learn more at rubenugarte.com.