If you’re a decision maker with access to a fire hose of information, but you’re still struggling to turn it into a competitive advantage, know one thing: You’ve got plenty of company.
Roughly 80% of large companies report they’ve seen an important strategic decision go haywire in the past three years because it was based on “flawed” data. Almost three-quarters (72%) say that delays in getting information to the right people have torpedoed “at least one” major effort in the same period.
There’s more. Just 27% of C-level executives think their company makes “highly effective” use of data, while about a third (32%) say access to mountains of information has actually “made things worse.”
That’s according to a new study from the American Institute of CPAs (AICPA) and its London sister organization, the Chartered Institute of Management Accountants. It’s based on a poll of 300 senior executives in 16 countries. No one doubts that “harnessing data can create a genuine competitive advantage,” notes Arleen Thomas, the AICPA’s senior vice president of management accounting and global markets. “Most companies just need to get better at it.”
The research uncovered three main hurdles to turning data into dollars. The first is being in too big a hurry. “Figuring out the specific question you need to answer, and then determining whether the right information exists and where it’s located in the organization, can be a slow process,” says Thomas. “Take the time to make sure you’re answering the right question.”
Then, start small. Launching huge company-wide initiatives, before decision makers have had much practice interpreting the numbers they’re looking at, usually leads to trouble. “Start with a narrow, highly focused project and then build on that,” Thomas suggests. “Small wins can make a huge difference.”
A third obstacle is often the most intractable, because of the politics involved. “Lots of companies have turf wars going on around data collection, and an entrenched bureaucracy that keeps relevant information from reaching the decision makers who need to see it,” Thomas observes. “In many places now, functional silos get in the way.”
Busting up the bureaucracy, so information can flow quickly to the right people, requires a kind of manager that the AICPA study refers to as “integrative thinkers.” The relatively few organizations that are making profitable use of big data have hired or cultivated executives Thomas describes as “collaborative leaders who can see horizontally across their whole organization and connect the dots.”
Note to data scientists: Want to be swamped with job offers? Polish your “soft” skills. Quant jockeys now “need to be good at communicating information in a compelling way,” Thomas says. “They also need leadership ability, to get others to act on the insights in the data.” Knowledge of computer programming, statistics, and analytics alone won’t cut it, she adds. “Employers are telling us those technical skills are necessary — but not sufficient.”