Investing in People: The Secret to Data-Driven Agility

I've heard many people ask what is so new about the idea of data-driven organisations. Surely, they say, every organisation is already data-driven. HR can't operate without people data. There would be no record of who worked in the organisation, who to pay, and what training was required. Finance couldn't last a day without financial datasets. They couldn't balance the books or approve any costs. Marketing couldn't survive without customer data. They wouldn't be able to reach out to or target customers.

There is nothing wrong with this argument. Every organisation is already data dependent and would collapse within days if they lost all their datasets. The same isn’t true of technology. Ransomware attacks have shown that companies can survive short periods without access to their systems.

However, a significant difference exists between being data-dependent and data-driven. Organisations that are just data-dependent are tied down to the capabilities of their systems and manual processes. Data-dependent organisations have outsourced many decisions on how they operate to major software companies.

If you think this is an exaggeration, I once heard a board member say that the first thing to be considered in the company's target operating model is that they are an SAP company.

Go back, reread and consider the enormity of that sentence.

The first thing to consider is that they are an SAP company. Not the customer. Nor the organisation's purpose. Nor the core value proposition. No. Before any of the above, you start by considering the requirements of the software that integrates your accounting, sales and HR data sets!

The thing is, this board member was not alone in their view. I've met people in many levels, in all sorts of organisations, who believe their role's purpose is to execute a process. Often, but not always, they struggle to articulate the value of that process.

This is not their fault. This is the hangover from an era where technology and data were so hard to configure that it made sense to design organisations around applications. We are no longer in that era. Success now comes from agility. The ability to rapidly redefine processes. To experiment and innovate. To know when to create your own applications with interfaces, algorithms, and automated data flows.

The only restriction on how you run a data-driven company is the capability of your workforce. Moving from a data-dependant organisation to a data-driven organisation is like taking the stabilisers off your bike and moving from set routes on cycle-paths to cycling anywhere you desire. Country lanes. Dual carriageways. Mountain paths. Hop from rooftop to rooftop in a demonstration of creativity and acrobatic prowess. It is all possible.

Data-dependent organisations are constrained to operate in a way their software suppliers defined. Data-driven organisations can choose when to rely on the comfort of stabilisers and well-trodden paths and when to remove the stabilisers and forge their own paths. Develop custom recommendation algorithms. Dynamic pricing models. Stock management models. Integrate them all to have a unique offer and supply chain capable of organisational acrobatics and responding faster to market changes than competitors.

What does this have to do with investing in people over data?

To compete on data, you need to develop your data products so that you no longer build your organisation around someone else's design. You can't outsource your data transformations to consultancies or depend solely on off-the-shelf solutions.

I first realised this when I was a consultant. I'd build a dashboard that wowed my client's CFO but struggled to help them get any value from it. His team agreed that the dashboard enabled them to identify cost-saving opportunities, but it didn't fit into their workflow. They didn't have time to save money. The solution was obvious: handing over ownership to his team and giving them the skills to develop the tool around their processes.

The impact was immediate and long-lasting. They saved money, used the dashboard in their workflow and started developing their own data products.

It forever changed my approach to data strategy. I used to recommend starting a data transformation by developing a proof of concept data product that wows people. I now recommend running training courses and shouting from the rooftops about the data products people develop with their new skills.

This year there have been countless news stories on investments in AI; from Microsofts 10 billion investment in OpenAI to the UK government's £900m investment in a supercomputer for the UK's AI strategy.

To enter the AI era, we must see these investments dwarfed by investments in data and digital skills.

Someone recently pointed out that as a CDO, I spent more money on training than technology. I hadn't realised that, but I'm not surprised and am very proud of that fact.

I challenge you to do the following exercise.

Find out how much your organisation invests in data, technology and AI each year and how much it invests in learning and development. Then research the learning support available in the types of digital companies your board looks to learn from.

Present both findings on a slide, start the debate and increase the investment in your people.