3 Reasons a Lack of Data Leadership Is Killing Your Business

Data is everywhere in our business and personal lives. From the Amazons to the Ubers, to the ways we recruit and find our own next career moves, data is transforming every industry. Then why are so many companies still so bad at data?

Our businesses have been producing data for a long time, and most have even developed a wide range of reporting capabilities to deliver insights throughout their organizations. The problem is neither a lack of data nor a lack of data-related activity.

The first reason organizations are losing the data race is by failing to connect data to improving business processes.

Data Value is the measurable difference in business outcomes from using data versus what would have happened without using data. These differences can be measured in only three ways: revenue, costs, and risk management. The business outcomes may be direct, or a few steps removed from data usage, but they are the only way data adds real value to an organization.

Too often data efforts stop at “interesting” – leading to nothing at all. Think of a simple example where a CFO gets a report on the regional performance of sales personnel. She may flip through it passively and toss it on the growing pile of half-read reports on her desk. No action, no value – and the costs of producing the report are wasted.

But what if she instead acted on the information to identify top-performing regions and lower-performing regions? Say she then arranges for the lower-performing regions to get extra training and monitors their performance closely in upcoming quarters. Future reports confirm a 25% improvement and those lower-performing regions are now above-average. Data Value!

Data Leadership is all about maximizing Data Value, whatever it takes. It starts with where data is initially created and is involved in every step of the data lifecycle, through usage and measuring Data Value from business actions. Data Leadership is simply business leadership that pays extra-close attention to data and how it can improve our outcomes.

The second reason is that solving data challenges is not primarily a technology or tools problem.

We need to use data to make a business impact, and we already have more data tools than we can count. We now have incredible abilities to create fancy new visualizations, or quickly develop highly sophisticated machine-learning models and artificial intelligence. One of the common activities at hackathons these days is to program little self-driving cars that race each other around a course. Amazing!

It is not the technology’s fault we struggle. It’s a much more human problem. The fact is that even though technology has evolved quickly, human evolution only goes so fast. Our ability to establish consistent definitions and appropriate uses for data is limited by our abilities to coordinate and reconcile data and business processes across people throughout our unique organizations.

Being able to make the most of data is a process like refining crude oil into gasoline and other byproducts. Just as how we would not pour a barrel of crude into our gas tanks, we cannot expect whatever data happens to flow out of our operational systems to be perfectly suited to anything else where we might want to use it.

Data Leadership understands that Data Value happens not by accident, but by coordinating everything we need to do to use data most effectively. These are disciplines like data quality management, data warehousing, data literacy training, and coordinating with program and project management.

The third reason is that a dysfunctional relationship between business and IT destroys Data Value.

As identified above, data is fundamentally about business, but we’d be kidding ourselves to think we could do it entirely without technology or tools. This is where Information Technology (IT) comes into the picture.

The relationship between the business-side and technology-side of most organizations may seem fractured beyond repair. Too bad! Restoring this partnership is essential to becoming a data leader.

It is simply impossible to get the people, processes, technologies, and data all acting in harmony without alignment among business and IT functions. Data is tricky enough under the best of circumstances – we cannot maximize Data Value while our technical talent stays relegated to the basements of our companies.

IT must regain its strategic relevance to the business as an enabler of data capabilities – and will not achieve this by simply taking ticket requests. A strong IT group proactively connects the potential of technologies to enable business improvements. With everyone’s focus directed towards Data Value, the importance of each role becomes clearer.

Data Leadership can be the bridge that reunites your entire business and maximizes its competitive future. And make no mistake, all organizations now face competitive threats from data-driven disruptors. This is obviously true in the private sector, but the public sector and nonprofits are facing the same challenges.

The question is no longer, “Will being bad at data lead to an organization’s demise?” The only question now is, “How long will it take?” Data Leadership is now business leadership, and there’s no time left to waste.

Anthony J. Algmin is not only a pioneer of data leadership, he is the author of the very first published book on data leadership: Data Leadership: Stop Talking About Data and Start Making an Impact! 

He is the Founder of Algmin Data Leadership, LLC, a company helping businesses transform their future with data leadership. Offerings include speaking, training, and coaching services. ADL’s Data Value Guidebook™ provides organizations with the direction to build momentum in their data leadership journey.

Anthony has led data transformations in many industries, serving as a project manager, data architect, and Chief Data Officer. Anthony has a bachelor’s degree from Illinois Wesleyan University and an MBA from the Kellogg School of Management. In collaboration with DATAVERSITY, Anthony travels the country as one of their most dynamic and popular speakers. Anthony lives with his wife and three children in suburban Chicago.

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