Challenge existing mental models
High-achieving executives have been shaped by the pivotal experiences of their careers, yet analytics requires executives to think beyond these mental models. The CEO must identify rigid modes of decision making among leaders, make it clear that the analytics era demands a new way of thinking, both individually and collectively, and guide them to that light.
Executives who are attached to the status quo and fear change will succeed in only one way: misdirecting the analytics initiative and perhaps killing it altogether. Ironically, this allows them to actually gain stature as the “innovators” are discredited and C-suite power shifts back to how it was.
Many CEOs underestimate the impact of mental models in the innovation process, often assuming that “thinking outside the box” exercises address the issue. As one financial services CFO told us, “Our mental models were so rigid that even how we thought about data itself needed to be challenged. [Information] had been a source of political capital — to be hoarded and primarily used to fight internal battles. We are only now coming to grips with the notion that the fate of the company is dependent on our collective and strategic use of information.”
Create an environment of rapid innovation
Successful analytics programs require a type of learning that few organizations are innately capable of. Analytics can enable breakthrough innovations but only if the environment supports open discovery and experimentation.
"To create, incubate and activate analytics quickly, innovation must be in an organization’s DNA," says Chris Mazzei, our Global Chief Analytics Officer. "It’s the CEO’s responsibility to create this environment of rapid innovation, where experimentation and failure may be the fastest route to innovation success."
If the analytics effort is anchored to traditional learning processes, it will not move fast enough to achieve meaningful change and competitive advantage. This “minimum velocity” at which insights must circulate to fuel innovation is widely misunderstood. Hampered by silos, incentives, and legacy behavior, most companies never approach it. A common sign of a low-velocity environment is an overreliance on problem-solving competitions, such as Kaggle. While these tools are invaluable and a crucial component of any program, they are just tools and, like any tool, can become a crutch if larger issues are not addressed.
Experimentation must be rewarded — something too few companies do. In the survey we conducted last year, we found that only 17% of companies tied innovation to compensation.
The rapid generation of big data over the past few decades has given rise to stunning capabilities — and there are no signs it will slow down. But in order for their companies to fully exploit them, CEOs must step up; they cannot abdicate leadership or delegate responsibility. The good news for the many companies struggling to optimize their big data and analytics investments is that they are not alone. The race for competitive advantage can still be won.
This article was originally published in the Harvard Business Review.