There’s been a lot of chatter on LinkedIn recently about creating a data strategy. Lots of arguments pass about what a data strategy is. Some suggest that your data strategy should just be part of your business strategy. This article skips past these arguments. We prefer the metaphor of flying a kite put forward by Rita Gunther McGrath.
Put simply, you’ll need the elements in Rita’s kite diagram all working in harmony. Let’s take a look at how this shapes a data strategy.
How do you go about creating a data strategy?
Step one is to identify the business strategy. Argue all you want about whether they belong in the same document or not. Without the business strategy you have no idea where you’re going. All the fancy plans for data will fail unless they align against the goals of the business.
This is where the first piece of the data strategy kite comes in: The Agenda.
The Data Strategy Kite Agenda
The agenda in a strategy kite looks at where the business is going. Rita recommends that executives place their top three objectives front-and-centre in every meeting they go to. If you are an executive that’s trying to move your data strategy forward, check your agenda to see whether you’re doing this right.
If you’re not an executive, you need to check the Annual Report or other Business documentation that will help you work out the agenda. Typically a business will be pointing at:
- Increasing revenues, by gaining market share, entering new markets, driving up growth and development
- Decreasing costs, by cutting back on waste, trimming poorly-performing operating businesses, or otherwise doing more with less
- Avoiding risks, by preventing bad outcomes, navigating new legislation and rules and keeping a great corporate image.
You must find the top priorities of your executive team. If you can’t, you’ll never create a data strategy that works.
What role do “Norms” play when creating a data strategy?
The “Norms” are the culture that your business has. This is how you behave. Who you are as an organisation. If no manager walked through the front door, what would your team be doing?
Office politics come into play here. You can easily get tripped up by trying to push an agenda that won’t fit the culture.
An organisation that is used to making “gut feel” decisions might not feel comfortable trusting your fancy new analytics platforms. How you navigate that change will depend on the place you begin. Trying to change too much, too quickly will send your strategy kite tumbling to the ground.
As Rita points out with the cliche “Culture eats strategy for breakfast”. Changing Norms takes time, leadership, and trust from the team.
Where does the “News” come in?
The news is the data used in the data strategy. If you’re of the opinion you need just one business strategy, this is the point where data and that strategy intersect.
If you can’t measure it, you can’t use it to drive the futureRita Gunther McGrath
This is where and how your organisation uses data and information. How can you exploit the data that is unique to your organisation and turn it into competitive benefit? What does your organisation know, hidden in its systems, that no-one else knows? How can you combine that with other information to create the killer edge?
The news section also requires understanding Data Literacy:
- How widespread is data in today’s decision making?
- Do all your stakeholders understand your analysis?
- How well are results and interpretations shared and understood today?
- What training might be needed to enable people to understand the news you feed them?
Beyond the data you’re going to leverage to create advantage, you also need to consider what information you need to guide the data strategy kite. How will you know when your strategy is working? What signals might indicate you’re on course to fail?
As you can see, the News section is where most data professionals feel most comfortable. Where they get alignment wrong is typically by not focusing efforts on the News that has the biggest impact on the Agenda. Because most data professionals have IT backgrounds, they may also feel uncomfortable engaging with the People to change Norms. As a result, data professionals may need more exec sponsorship to ensure the data strategy isn’t too “tech heavy” and “people light”.
What does “Allocations” mean when creating a data strategy?
Allocations describe where and how you’ll deploy your resources. Creating a data strategy demands that you focus resources where they will have greatest impact. You cannot have your cake and eat it. Hard choices must be made.
This part of our data strategy marshals our funds and our people. We set the budget and spend it where it has the biggest return. Review the different business cases put forward by your team and pick the winner.
By definition some people and projects will need to be disappointed. Others get funding and manpower to drive towards your goals. Do not spread your bets; focus your efforts on the areas where you’ll have the greatest chance to succeed.
Allocations also set internal compensation targets. Some of your funds must be spent to get your team to behave differently. You may need to work with HR to set or modify KPIs. Align your reward structures against the tasks and activities your data strategy needs. If your strategy says one thing and the KPI says another, you’re doomed to fail. This will leave your strategy kite fluttering in the wind, stuck in a tree.
Bringing the kite body together – the People
People are at the heart of the data strategy kite. What binds the Agenda, Norms, News and Allocations together are the people in your organisation. As a result, you must reorganise how people work together to deliver meaningful strategic change.
Firstly, establish what your existing organisation looks like. Examine not only the official reporting lines, but also the “water cooler” network. Rita calls this the informal power structure in your business.
A big mistake is to try to implement a new strategy with a structure that was built to support the old oneRita Gunther McGrath
Many execs baulk at the mention of “Change Management“. At the same time, if you want this kite to fly it’s essential to know how decisions and work is done today. Where will the resistance come from? Who will fit into the new strategy, and who needs to be moved to a new role or moved out of your way?
The people are at the heart because they are impacted by all four points of the kite:
- Your Agenda encourages the people to head in the right direction;
- Your Norms define the behaviour of your people and what guides their decisions
- The News informs your people, allowing them to make better decisions and direct the kite; and
- The Allocations encourage the people to behave the right ways, and provide resources with which to do so
The tail of the Data Strategy Kite
History is the tail of the kite. When creating a data strategy you’ve got to be conscious of your history.
- What have your predecessors tried?
- How successful were they?
- What could you do differently to make better moves?
- And what will be too hard to do, because your people have seen it fail time and again?
The definition of insanity is doing the same thing over and over again and expecting different resultsNot Albert Einstein, apparently
In Rita’s example, she suggests that the history helps balance the kite. But too much historical baggage will strop you getting off the ground. As a result you need to tread carefully with this part of your strategy.
Leadership – guiding the kite
One of my favourite parts of Rita’s analogy is the string used to guide the kite. Leaders get to pick where to fly their kite. You choose when to put it into the air. But you can’t get it to go wherever you like. After all, the kite is still at the mercy of the wind.
To guide your data strategy kite, Rita suggests setting big symbols. What do your team see when you show up day-to-day? How are your actions and words interpreted?
Many execs put together grandiose sounding vision statements. But unless your team sees you living and breathing the vision, they won’t be taken along for the ride. As my dad always said “Actions speak louder than words”. Make sure you walk the talk.
How do we fly this kite?
So, you’ve created your data strategy. You’ve used the kite analogy to get everything in balance. But once it’s airborne you’ll need to keen an eye on things and make sure it performs as you expect.
When you’ve got everything in tight alignment, the strategy will fly. Your people will know what they need to do, how they should do it, where you’re going and how to adjust on route.
When you’ve just launched, or need to change your strategy, it’s going to feel fragile. It takes time for people to adopt your new ways of working. Therefore you should expect a little turbulence, and for things to feel misaligned after a big change.
One of the reasons many strategic changes fail is due to this discomfort. When your people feel out of place, they struggle. It’s easier to go back to the safety of something that works than push forward with “the new”.
Creating your data strategy
Your data strategy must be unique. No two will do the same thing. Chasing shiny new toys like Big Data, AI, Machine Learning – or the next fad tech that comes along – is not a strategy on its own.
At a minimum you’ll need to diagnose the problem your strategy seeks to overcome. Most of the time that problem is not “we have too much money and need to spend it on a new toy”.
Get to the meat and bones of your business challenges:
- How are your competitors beating you?
- What would delight your customers in ways your competitors could only dream of doing?
- Which major business objective can your strategy take you towards?
- What unique assets do you have that can be marshalled to beat your competition?
I’m not for one minute saying the latest technology won’t play a role. However, if you’re solely reliant on some new technology you don’t have a coherent strategy to begin with.
Get in touch:
If you want to talk about your data strategy, please get in touch.
We will help cut the waffle and focus on areas where you can dominate the competition.
Our approach brings the people in early, leveraging their skills, knowledge and experience. But most importantly it leaves you with a clear action plan of what to do, when to do it, and how to make it fly.