December 13, 2015


by Bruce Rogers.

Some businesses have always been built on data. For others, the path to competitive advantage through data and analytics is a new one. In every organization, however, CEO support and involvement are key in setting direction. “The stronger the relationship between a CEO and his/her data analytics team, the more likely an organization is to invest in data-centric technologies,” says Matt Ariker, chief operating officer of the Consumer Marketing Analytics Center at McKinsey & Company.

According to a 2015 Forbes Insights survey of 316 senior data and analytics executives in global companies, there is a strong correlation between CEO involvement and the maturity of the big data and analytics effort. In addition, 51% of respondents said that big data is the single most important way to gain competitive advantage.

Culture is the Problem (and the Solution)

Consultant, educator and author Peter Drucker taught that culture drives action or, more colloquially, “Culture eats strategy for breakfast.” Data-driven business models represent a break from the past. Change requires uprooting and replacing traditional ways of thinking that may have worked in the past but are not as well adapted to the present or future.

More than half of respondents suggest that the idea of a data-driven strategy is not universally accepted in their organizations. They also say that adapting and refining a data-driven strategy is the single biggest cultural barrier.

The barriers don’t stop there. Even people adept at using data may not think about using new data sources and techniques to gain new insights. “In the financial industry, people know and trust their Bloomberg screens,” says Ross Farrelly, Teradata’s chief data scientist in Australia and New Zealand. “When you suggest actions based on alternative data sources, there may be resistance.”

“Often, the questions people ask are constrained by the traditional data sources that they are used to using,” continues Farrelly. “Coming up with new questions and approaches requires creativity, and that requires changing habits.” A body in motion stays in motion until an outside force intervenes. In most organizations, there is no more powerful outside force than the CEO.

When the CEO sets an example, barriers disappear. The CEO can set that example in many ways:

  • Words and deeds
  • What is said and not said
  • Who is promoted or chooses to leave
  • Where people sit in the organization

For instance, Time Inc. CEO Joe Ripp set an example by bringing his new chief data officer into the inner circle. “Within the first week, I was invited into the senior executive leadership team,” says Dr. J.T. Kostman, chief data officer of Time. “We meet every Monday—the CEO, CFO, heads of all the businesses—locked in a room together for four hours every week sharing strategy, successes and operational details about the company. That exposure, that collegiality and that emphasis on working together symbiotically is enormously important in driving the outcomes of the business.”

A similar example of CEO support driving a tighter organizational embrace of big data comes from insurance giant AIG. “Our CEO, Peter Hancock, started a whole new data science organization,” says Heather Wilson, chief data officer of AIG. “We were the first in the industry to do that. Peter is looking for the sweet spot in the triangle of data, data science and digital, and we’re modeling the data in new ways to gain new insights.”

Hancock also brought in a data-centric CIO in the fall of 2014 and made him a direct report. This move demonstrated the importance of data and analytics by inviting the leader of data initiatives to sit at the same table.

Leadership as a Force Multiplier
Just because there’s a lack of high-level leadership of data and analytics in an organization, that doesn’t mean there are no related initiatives. Even when the C-suite pays only lip service to the value of data, there may still be scattered local initiatives that never gain traction because nobody in the C-suite is ensuring that it’s a priority.

Scattered local initiatives are a good thing: it means there is material to work with. The missing ingredient is leadership. Like water poured on dormant seeds, a bit of leadership can transform a handful of outlaws into the seven samurai.

“One of the great values in hiring and standing behind a chief data officer is cohering, integrating, coalescing all of the scattered data initiatives and bringing them together to create a force multiplier effect,” Kostman explains. “Part of it is that there are fewer redundancies and less waste. But the bigger story is that you have a chance to create a true gestalt: a whole greater than the sum of the parts and the opportunity to create something truly meaningful for the company.”

Use Data to Bring People Together
“If you work with data, you need to be a leader,” says AIG’s Wilson. “You have to be able to have tentacles everywhere in the entire organization. You have to bring people together. For instance, we standardize the data, put visualizations on top of it and get everybody looking at the same data and agreeing on the same metrics. That’s huge. And it’s the fun part of my job.”

Most organizations have plenty of people with the ability and desire to harness data in the service of decisions. And few executives would dismiss the importance of data and analytics, even if they do not make them a priority. “Everyone talks about wanting to be a more data-driven organization, just like everyone talks about going to the gym and losing weight,” Kostman points out. What’s required is a catalyst—and that catalyst is leadership.

Bruce Rogers is the Chief Insights Officer for Forbes Media, responsible for managing Forbes’ thought leadership research division, as well as the Forbes CMO Practice.