By Larry Gorkin
Leaders considering big data initiatives should walk before they run. They must first ensure the effort has a total business context of strategy, skills, and market intelligence planning that are essential for success. Failure to do so risks unmet business goals and huge opportunity costs.
Before expanding on these themes, it’s important to acknowledge that leaders have good reason to be interested in big data. Underlying this interest is the unprecedented set of data being collected at every level of commerce and social interaction across the globe. In parallel, firms now have access to unprecedented computing and analytic power at lower than ever costs.
This combination of data and low cost power computing opens the door for new market insights that can support fresh business opportunities and competitive advantage. In fact, it’s happening all around us. Pandora knows the music we like. Retailers adjust pricing dynamically in response to market conditions. Police departments align staffing with predicted crime increases. It’s quite compelling.
So, why prescribe caution? In short, because not all companies can enjoy this success. Some companies may not be ready just yet. Others may never be ready.
To start, companies need a clear strategy that big data can support. Big data is not a strategy or an end goal of its own. Instead, big data is an enabler. For example, Netflix uses big data to predict and recommend shows that individual users will like. This personalization supports Netflix’s core strategy to provide customers with the best any time, any device video entertainment available. The point here is that leaders need to begin with a strategy that big data can support; not the other way around.
Related, companies need a foundation of market understanding to determine if and how big data can be used. Leaders need to know who their customers are, what their unmet needs are, and how they make buying decisions. Consider that Whole Foods is a $3B grocery giant because it recognized an unmet market need for natural and organic food; no big data required. The same can be said for Apple and Starbucks in their respective markets. Leaders must know the basics before moving to big data.
Finally, organizations need the capacity to use data insights they develop. Already, companies spend hundreds of millions of dollars collecting market insights such as primary research, syndicated reports, and web analytics. Yet, many leaders say they are dissatisfied with their teams’ ability to access and leverage that investment. Big data adds a new demand, by requiring a team with the better skills and experience to develop sound actionable insights. Leaders need the capability before the data.
Stepping back, the question is not whether to pursue big data. Instead, the issue is whether your business has the market insights needed to reach its goals, and if/how that position can be improved. The answer to that question can lead in many directions, which may or may not include big data. To that end, here are four steps leaders can take to clarify their position and develop a path forward
1. Establish Requirements– Determine the core market insights required to support the business. What data/insights are needed to deliver the strategy? What data/insights will improve execution?
2. Inventory Your Position– Assess how well your organization’s insight requirements are being met. How current are the insights? What are the gaps? How big are they? What are the opportunities?
3. Evaluate Readiness– Determine whether your organization is insights driven. How often are insights used in decisions? How accessible are insights? Are managers capable of using insights?
4. Create a Plan– Synthesize the learning to set goals and a path forward. What insight gaps are most important to fill? What new insights or capabilities will drive the business? What are next steps?
It doesn’t matter if your data is big or little. More important is that it is relevant and gets used.
Questions: Does your business know the critical insights it needs for growth? Do you have a plan to develop and use them? How can you do better?