A manufacturing president asked me to come in recently because she’s frustrated by how the company is managing critical data. She believes the issue isn’t getting enough attention, and she wants to figure out what they’re doing wrong. Fair enough. I prepared three questions that would get the discussion started:
1. Can you quantify the value of leveraging your critical data more effectively?
2. Have you even identified what your “critical data” is and where it resides?
3. If you have identified the most critical data, are you confident it’s accurate?
She paused for a few seconds before answering. “No, no and no.” And then came an expletive.
More people like this CEO have bought into the premise that smartly managing its data should enable a company to establish a legitimate competitive edge. When this posture is taken, being able to answer “yes” to the above three questions becomes really important. A data strategy can’t be successfully executed if one of the answers is “no”. Yet a large majority of companies haven’t gotten to this point, and many aren’t even close. And they know it. And it makes people want to swear.
Why can’t companies do better managing their data?
The number of real-life reasons would make this an extremely long post, so I’ll offer up just one:
“Data” remains tagged as a tech issue by many executives and is deflected to the IT department to manage. So is cyber-security. Why this continues to happen in the year 2016 should bear closer examination by the many companies still doing it. What they should focus on first are job descriptions and role definitions, since this is where the problem starts.
People in IT are not data stewards; they are data custodians. The difference is significant. Custodians should primarily be concerned with making data secure and available. They don’t understand the business context around specific data well enough to know how sensitive it is or how available it needs to be. The data stewards, a.k.a business areas, have to tell them this, which happens way less frequently than it should. Why? Because senior management hasn’t declared that it’s an important internal line of communication. They’re still stuck on associating data with technology management instead of business impact. And so important info doesn’t get relayed to the people who shouldn’t have the responsibility to interpret it in the first place.
Effectively managing critical information enhances an organization’s value, no two ways about it. As such, it should be a core oversight responsibility of the executive team (and boards). In this information-driven, connected world we’re all now part of, companies that embed careful, creative, smart handling of data in their value propositions and various strategies will greatly improve their competitive strength. Those that don’t are putting themselves at greater risk of failure, and spectacular free falls will happen to some because of it.
No business is immune to the potential negative effects of information overload. And no business can avoid a future in which the amount of data they create and collect will rise exponentially. Therefore, executives should be asking themselves what their risk tolerance is for operating an organization without a formal plan to effectively manage this growing mountain of data. “There isn’t a plan” won’t get many people fired today, but it will in the not-too-distant future.