Before the advent of big data, executives struggled to amass the intelligence they needed to make informed decisions. Now, thanks to impressive technological advancements in data capture, storage and analysis, they’re facing the opposite problem.
Specifically, according to recent research conducted by a division of audit, tax and advisory services firm KPMG, three-quarters of the 144 CFOs and CIOs who participated in the study said they found it hard to incorporate big data into the decision-making process – even though 69 percent reported viewing data and analytics to be “crucially or very important” to their companies’ current growth plans.
“We live in an increasingly data-driven world where [data and analytics] has the potential to revolutionize the way we conduct and manage business operations across the entire enterprise,” said Mark Toon, CEO of KPMG Capital, in a statement quoted by the news source. “From CEOs, to CFOs, CIOs and CMOs, the challenge for today’s executive is understanding how to draw actionable insights from data and turn them into tangible, genuine results.”
Given the enormous quantity of data, the task of gleaning meaningful information has become too big for the existing members of the C-suite to handle alone. There are a couple of ways firms can remedy this issue: Empowering employees and bringing in a chief data officer (CDO).
“Savvy executives are realizing they must now delegate and distribute decision rights deeper into their organization to empower their managers and employees,” wrote Gary Cokins in an article for Information Management. “This is because of the exponentially growing mountain of data, both structured (numbers) and unstructured (text) data including social media, and a sped-up and volatile world.”
Rather than appointing themselves as sole decision-makers regarding all aspects of data analysis, executives should break down decision types into two categories: strategic and operational, Cokins advised. Although senior leadership should maintain control of strategic decisions – those that Cokins described as being few in number but extremely impactful – bringing in employees to handle the operational side of things has the potential to be extremely beneficial. So, how should executives delegate tasks for maximum impact?
Strategic vs. operational
Strategic decisions encompass high-level elements such as the mission of the organization, the products and services on which the firm should focus to maximize value and the strategic direction the business plans to take going forward. Conversely, “operational decisions are daily, even hourly, and often affect a single transaction or customer,” Cokins explained. “In the sales and marketing functions, operational decisions maximize customer value much more than policies do” – especially with regard to clarifying decision rights and designing effective information flows.
Some executives may be reluctant to cede control of certain corporate aspects to subordinates. In such cases, it’s important to realize that offloading operational tasks can actually help make a company’s processes more efficient across the board – provided the employees given extra responsibility are chosen carefully.
“Managers who delegate well and follow up consistently are able to accomplish infinitely more than those who hoard tasks their subordinates should be doing,” wrote CareerCast.com’s Tony Lee. “Remember that the key duties of a manager are to plan, organize, coordinate, set goals, establish priorities and think creatively.”
Ultimately, executives who allow themselves to become too bogged down in minutiae risk not being able to see the forest for the trees.
Bringing in a CDO
“The responsibility for how … data is used and manipulated across different parts of an organization is a new challenge,” Brad Peters, CEO of San Francisco-based on-demand business intelligence and analytics provider Birst, wrote in a January article for The Guardian. “Making key business decisions based on data can make all the difference between success and failure, so managing these processes across multiple line-of-business teams requires a new approach. More understanding of how data is being used within a company is required, driving the need for chief data officers.”
Peters argued that adding a CDO position to the C-suite is a logical progression. Uniting raw data across an organization is as pressing of a need in today’s corporate climate as strategic marketing alignment was in the 1990s and managing information technology was in the 1980s, which resulted in the creation of the chief marketing officer and chief information officer positions, respectively.
“With competition in the market remaining fierce, company performance depends on strong product and service offerings, supported by efficient IT processes and marketing effectively,” Birst concluded. “However, all of this is underpinned by being able to collect, understand and use data as a strategic asset. The role of the CDO will ensure that data is used to make the right critical decisions and achieve success.”
Whether firms elect to give employees more responsibility, create an entirely new C-suite position to oversee the task or deploy a mix of these two strategies, one thing’s for sure – companies that fail to set up the infrastructure necessary to manage data and analytics will likely fall behind in their fields.
About Caldwell Partners
Caldwell Partners is a leading international provider of executive search and has been for more than 40 years. As one of the world’s most trusted advisors in executive search, the firm has a sterling reputation built on successful searches for boards, chief and senior executives, and selected functional experts. With offices and partners across North America and in London, the firm takes pride in delivering an unmatched level of service and expertise to its clients.