Technology & Innovation

Driving a data-centric culture: The leadership challenge

January 16, 2015

North America

January 16, 2015

North America
Janie Hulse

Senior editor

Janie Hulse is a senior editor with The Economist Intelligence Unit's Thought Leadership team. Before joining the EIU, Janie worked with The Economist Group and other organizations as a freelance correspondent and consultant based in Buenos Aires, Argentina. She has also held managerial roles in the areas of marketing and research with US global companies and within US Government agencies. She holds a master's degree in economic development from the London School of Economics and a bachelor's in industrial relations from Cornell University.

Views from the C-suite

Embracing data as a corporate asset—and a source of competitive advantage—is not just a “good idea” that companies should consider. Such adoption will help determine the winners and losers across multiple markets and industries in the future.  

In the last couple of years, corporate focus has shifted: first, from investing in the right technology and tools; then to acquiring the right talent and skills; and now to building the right organisational culture that can realise the business value of powerful big-data analytic tools. Most organisations today are still focused on putting in place the right technology and talent, but others have evolved further and are working toward fostering a data-centric corporate culture. 

Organisational structure is necessary—but only the beginning
To capture the business benefits of big data, CEOs and their C-level teams face the formidable challenge of transforming how their organisations think about data and what they do to derive relevant and actionable insights from the wealth of information that is increasingly available to them. The top-down approach they devise and implement for executing their big-data strategy is critical to their success, and so is the bottom-up engagement with data analytics they cultivate among middle management and rank-and-file employees.

Much attention has been given to the structural changes forward-looking companies are making to strengthen the ownership of big-data strategies. Within the enterprise, these structures harmonise the thinking and efforts across business units. Such changes include the creation of new leadership roles and new governance bodies focused on data analytics. For example, earlier this year, Wells Fargo, a top-four US bank, named Charles Thomas to the newly created position of chief data officer (CDO), with the mandate to oversee the company’s data strategy, provide enterprise data governance and determine ways to leverage data for improved risk management and customer experiences.

“We had hired people and invested significantly, but it was done in silos—there was no harmony,” says Mr Thomas. As CDO, his mission became to tie all the corporate efforts together and, in his words, “to enable and govern” the intra-organisational discourse of managing and capitalising on data and information as corporate assets. Another structural element Wells Fargo introduced is the Enterprise Data Council—a governing body that includes the “heads of state of data” of all vertical and horizontal business units; the council provides a shared foundation for data initiatives, such as harmonised data standards and definitions. 

But the trickier, and arguably more important, changes involve company culture. Creating new roles and units can be done overnight, but evolving an enterprise into a data-driven organisation takes a lot more—and a lot longer. What are the key ingredients to successfully fostering a corporate big-data culture?

The recipe for successfully leading a data-centric culture:

Inspire with values and vision
Culture starts at the top. And so does the challenge of creating or evolving into a data-driven organisation. A chief executive who leads and inspires by example is often at the core of successful data-driven organisations. “Our CEO is a computer science major—a numbers person,” says Rod Morris, senior vice-president of marketing and operations of Opower, a cloud-based software solutions provider to the utility industry, “so data underpins everything we do—from providing real-time energy savings tips to customers to predicting the success of our recruiting campaigns to deciding what soft drinks to offer in the employee pantry.”

Another key ingredient that the CEO and the top leadership team need to provide is a strong values-based vision of what a data-driven culture could be, and should be, and what that would do for the business and the organisation. “You have to paint a very vivid picture of tomorrow,” says Mr Thomas. He adds that at Wells Fargo, customer service is a core value that motivates employees at all levels. So he and the C-level team have successfully framed top-priority data initiatives as seizing “missed opportunities” for employees to do more for their customers and serve them better. Our survey findings confirm the importance of top-down vision and leadership—respondents from companies with above-average revenue growth, profitability and innovation performance are twice as likely as the rest to report that their CEO and the rest of the C-level team have a very positive attitude towards big-data analytics.

Enable with expertise and education
A lot is being said and done about big-data analytics in the business world today, but real knowledge and understanding of the latest data-science methods and tools, and how they can be applied to drive business outcomes, are still hard to come by among corporate executives. One-third of executives responding to our survey see the lack of understanding about how to apply big data to their role or function as the most common internal obstacle to greater use of big-data analytics. 

At the same time, such applied knowledge can be a true value driver, as strong-performing companies say that they are more likely to have executives who are well-versed in big data and its practical uses. Over 61% of respondents from companies with self-assessed above-average revenues and profitability agree that most senior executives in their organisations have a good understanding of big-data applications and how they apply to their business.

Only 38% of average or below-average performers feel the same way. Mr Thomas of Wells Fargo considers securing the right expertise and talent to be critical to success, as is the continued education of business executives and re-education of existing analysts and statisticians. “A big part of my mission,” he says, “is to cultivate ‘activist analysts’ who are not only analytically gifted and trained, but can also think like business people, understand business needs, and internalise business objectives.”

Promote collaboration and transparency
Even in the presence of a strong top-down vision of and leadership on big-data strategy, and with abundant analytical expertise across the organisation, mustering the necessary agreement and collaborative focus among top executives and their departments is still very challenging. According to our survey results, lack of agreement about the value of big data within the senior management team is the third most common obstacle (selected by 23% of respondents) that stands in the way of greater use of data analytics. “There’s no magic alignment,” says Mr Thomas, referring to the need for the top leadership team to constantly drive buy-in and cohesion of focus among different executives to achieve the big-data strategic vision.

A unified approach to big-data initiatives is important for their success and is also key to overall success of the company—survey respondents from top-performing companies are much more likely to state that their senior executives collaborate on implement big-data initiatives (39% vs 25% for average and belowaverage performers). How is that done in practice? Mr Thomas believes that one critical success factor is the ability of his team to concentrate the corporate big-data agenda on areas that are very relevant to the business units and to ensure a good balance among the topics of interest to different departments. Another effective tactic, according to Mr Morris of Opower, is letting the data and the results speak for themselves. “Transparency cures issues of cohesion, collaboration and competing agendas,” he adds. At Opower, data-laden dashboards are used at all levels as powerful tools to support decisions and justify resource allocations.

Engage through communication and transparency
Culture is about leadership, and leadership is about communication. The big-data transformation companies are undergoing requires active and deliberate change management—and constant communication. “Most executives realise they need better analytics and are ready to embrace big data—they just don’t know how to get there,” says Mr Thomas, “so you have to constantly communicate and inspire.” He continues that executives and employees from different business areas often have very different perspectives, knowledge levels and priorities. Therefore, finding a common language to speak about big-data initiatives is a real challenge. “The burden is on the leadership to communicate and on the CDO to translate and create ambassadors and evangelists” throughout the organisation to convert the science and technology into opportunities and results.

The corporate big-data challenge has evolved from one of technology and tools to one of culture and leadership. In our survey, one-quarter of respondents admit that they have no experience with the human aspects of big-data initiatives. For companies that underperform in profitability and revenue growth, this percentage is as high as 38%. To succeed in realising the business benefits that big data promises to deliver, executives need to focus not only on acquiring the technology and tools and realigning the organisation but, most important, on rallying and leading the enterprise through the cultural transformation of becoming a truly data-driven organisation.


Enjoy in-depth insights and expert analysis - subscribe to our Perspectives newsletter, delivered every week