WITH THANKS TO OUR CONTRIBUTORS
Heather Allen, formerly Executive Vice President,
Marc Allera, Chief Executive Officer
Vivek Badrinath, Deputy Chief Executive Officer
Johan Kirstein Brammer, Senior Executive Vice
President, Head of Consumer & Group Chief
Hanneke Faber, Chief Commercial Officer
Roberto Funari, Executive Vice President,
Category Development Organisation
Anders Jensen, Executive Vice President
and CEO MTG, Sweden and Finland
Modern Times Group
Alexis Nasard, formerly President and Chief
Niek Jan van Damme, Board Member, Germany
Deutsche Telekom AG
When it comes to data and analytics, the risk of doing nothing is far greater than the risk of putting faith in a new approach
The amount of big data that is available today through the Internet, connected devices and social media is quasi-unlimited. Most organizations now own, or can own, the data they need to make better decisions faster.
The challenge is to create companies, build governance, enhance culture and find talent able to take advantage of the data landscape that organizations find themselves in.
At Russell Reynolds Associates, we are seeing an increase in transformational roles like chief data officer and chief analytics officer at the world’s largest companies, driven from a need to become more data savvy. Data is changing business models and, we believe, will be the single biggest influence on future talent needs in the next few years. It is changing institutions inside and outside.
Russell Reynolds Associates has been speaking with some of the most senior commercial leaders across a range of consumer-led industries. Our aim in this process was to understand how data is being used and to what effect, what impact this is having on leadership from the board downward, and what the impact is on the talent and capabilities within the organization, both now and for the future.
Our findings show that companies that are leveraging data focus on innovation with well-defined outcomes. They are also looking hard at the structure and behavior of their functional teams, as data brings down traditional functional barriers. Data often shifts power in organizations, but this must not disrupt its ability to execute.
Everyone who participated in this interview process agreed on two key points: 1) that applied data and analytics will lead to significant changes in the way they do business within a five-year horizon and 2) that there are still major obstacles to overcome in order to fully realize the potential of data and analytics within their business.
Given that, dynamic engagement and understanding at the board level are critical to make the decisions and investment needed to fully realize the benefits of a data-driven organization. This flows down the organization and its culture and impacts the most important skills and competencies of the leader who will successfully and sustainably transform the organization.
Data is here—to stay
In 2013, Russell Reynolds Associates saw the first senior-level executives being recruited in North America who were dedicated to data and analytics. This was a reaction to the complexity, risk and opportunity that data represents for most organizations. This is a trend that has followed in Europe but at a much slower pace, with the subject only recently being elevated to the boardroom.
Organizations across all sectors are beginning to understand the value of leveraging data and analytics. The steps from understanding to implementing to creating visible value are not straightforward and require changes throughout the organization.
Data has always been critical to decision making in business. However, given the sheer volume and immediacy of data to which organizations now have access, it is enabling speed, agility, accuracy and innovation. There is much discussion around the volume and velocity of data and the challenge that poses when it comes to turning this data into insight and, most important, action.
As a counter to this, the availability of cheap computer power, storage and the lower bar to access analytics capability means the complexity is becoming more manageable. The challenge is to invest in areas that will bring the most return. Our study found that leaders see the application of analytics to all parts of the business. However, a priority is given to areas of data-driven innovation that focus on three key areas:
Traditional structures and leadership approaches are under strain trying to achieve these outcomes. Solutions to gathering insight from data don’t sit within one function or under one individual.
Stretching the organization
The journey to organizations fully adopting data and analytics is neither linear nor simple. Through our study, five key themes emerged that are changing the shape and interactions across functions within businesses:
The challenges of transforming legacy businesses, both from a technology and a culture standpoint, are completely different. It combines inadequate systems and long-standing operating models, which makes the transformation hard. It is an issue of winning investment to enable an organization to make the changes necessary whilst simultaneously convincing an organization that does not want to change of the necessity of doing so.
Appointments into specific senior data and analytics roles are frequently the recognition of the start of transformation. By this point, the value of data has been proved tactically and usually functionally. It is recognition that an enterprise approach will yield significant value for the organization.
Decoding data for organizations
To enable a data-enlightened organization, there are fundamental changes that have to happen within an organization:
Genuine ownership of data from the board level down – Organizations that continue to leave data residing in silos and ungoverned will not only miss opportunities but also put themselves at risk. This starts at the board level.
Data and growth culture – Beyond board buy-in and catalyst roles, the culture of the organization must be one that makes decisions based on data as standard, not as isolated processes.
Translator role: Finding, enabling and growing the translator – The right leadership for embedding data and analytics within an organization may already exist. The translator role is the bridge between the commercial business outcomes and the deeply technical world of analytics. Not only must this role hold the right attributes, but it must also be enabled by the board to be successful.
GENUINE OWNERSHIP OF DATA FROM THE BOARD LEVEL DOWN
Investing in analytical capability carries some degree of risk. Most organizations are trying to solve problems that haven’t been solved before within their industry or their clients.
This risk is increased when the board, and associated committees that help make decisions, does not have “data-native” capability. Boards need a mechanism to understand the data literacy of their organization and the actions they need to take in order to break down organizational silos and invest in areas that will give the greatest return in the short and long term. Traditionally, risk has been measured by a bottom-line approach that is in danger of becoming more destructive than helpful in light of how risk must be managed within innovation processes.
Russell Reynolds Associates has seen organizations tackling this problem in one of three ways:
Maintaining a risk-savvy board director – Much like digital, forward-looking boards ensure they have at least one member who understands the risk and opportunity that analytics brings to an organization.
Augmenting existing committees – For organizations that have a technology committee, this seems like the natural place to assign the ownership. However, this can lead to analytics being “a technology thing” when our interviews showed that this is a commercial capability, underpinned by technology.
Creating a translator role – Direct reports to the CEO can be the main advocate and owner of data across the organization. The translator needs to be empowered and supported in order to have impact, which, in and of itself, can cause tension within an organization as overlaps between functional areas increase.
DATA AND GROWTH CULTURE
Through our discussions, many leaders found that one of the most significant barriers to creating an organization that truly makes decisions based on data and analytics is the culture of the organization. They saw the technology and process changes finite to manage, at least in the near future, but looked at the culture as something that doesn’t always have a well-defined path. There are tangible actions that can be put in place to act as beacons and begin the culture change.
Culture is something that executives recognize that they have to proactively address rather than allow it to change by chance. Each organization will be at a different starting point based on how data has been used in decision making. It is not necessarily the case that those organizations that have always had data at their fingertips will be the easiest to change. Often, those are the organizations that will resist change the most, as they do not perceive themselves to be anything other than data driven.
TRANSLATOR ROLE: FINDING, ENABLING AND GROWING THE TRANSLATOR
During our discussion with these senior leaders, we built up a profile of the skills and experience organizations need to develop and acquire. What emerges is the translator.
The translator role speaks two languages. The translator is able to speak with the business, in his/her own terms, to understand the needs and articulate the benefits. The other language is with the data-literate community, able to take what are often high-level and poorly quantified needs and iteratively create the value and the insight the business is craving.
The translator has to overcome the two biggest hurdles that hold back organizations today: organizational resistance closely followed by inadequate technologies.
SINGLE DATA POINT?
One of the dilemmas that organizations will face is how to enable data. Appointing the right dedicated senior executive has catalytic effects within the organization and gives the CEO a single trusted advisor. The translator often has small teams dedicated to the role to act as centers of innovation.
But at the same time, the translator devolves responsibility from other functions to own and leverage data. This is why the translator role has to have a number of attributes that can make him or her successful in decoding data for the organization.
Given the deep complexities of harnessing data, the transformational leader who emerges needs to be the bridge between commercial decision making at the highest level and the technology and data fabric and infrastructure that enable insight.
The Translator DNA
Dissecting this profile, we see the following attributes as key:
Curiosity – When organizations can harness the data they have, they are often faced with truths that are confusing or counter to the experience of the executives within the functions. The skill is to ask more questions and take more data to understand the insights. The translator is the person who allows the data within the organization to deliver the insight rather than finding data that supports specific scenarios.
Happy with intellectual confrontation – Data within organizations brings both a version of the truth and conflict. Occasionally, organizations are presented with data that may not fully support the current business model or product. The role of the translator is to use this data to ask teams and functions hard questions. This may drive the need for more, or cross functional data which will test assumptions. This level of challenge may be counter to current leadership and organization culture.
Self-regeneration – Individuals who are able to articulate the value of data and analytics to a senior level will have had experience in leadership previously. They bring a core skill set that is deemed “table stakes” in roles like this. They are able to influence people across the organization, they feel comfortable with ambiguity, and they are able to navigate a path through that and galvanize teams without the need for direct control. We see this as a core skill set for this new leader in data and analytics.
Calculated risk taking – The risk of doing nothing is far greater than the risk of putting faith in a new approach. These leaders need to be able to lead and communicate the possible benefits of change without being fully confident of the outcomes. They must equally be tolerant of failure—on the condition that the learning is not lost. They see a big difference between failure and failure to learn.
Disposition for action – Organizations can always request and analyze more data. Leaders will be overloaded with data that presents facts about the enterprise. Translators are able to take action with the data given to them. This can often be hypothesis driven, made without complete data in order to create commercial outcomes more quickly.