At Corinium’s recent CDAO Melbourne event, we were thrilled to have on board John Studley, Lead Partner for Data and Analytics and Danielle Malone, Director for Insight Analytics at PwC. We caught up with them at the conference to find out more about the intriguing figures announced in their recent report, ‘Big Decisions.’ The global report found that Australian organisations lagged when it came to leveraging data to make business decisions that drive the enterprise strategy. The report states that “61% of Australian organisations admitted that their decision-making process is only ‘somewhat’ guided by data.” We asked John to shed some light on why that might be.
Corinium: In PwC’s latest report on unlocking data possibilities with advanced analytics and machine learning, some really surprising statistics are revealed, demonstrating how far behind Australia is when it comes to leveraging data analytics to drive business decisions. Why do you think that is?
John Studley, PwC: Two main reasons. It’s clear to me that many Australian companies still have a cultural blind spot with data analytics. There is a pervasive psychology in this country of self- sufficiency being a sign of strength. It reminds me of the classic King Gee “I know boats” commercial. So as a result there’s a lot of talk and too little serious action. Where it is occurring, it’s predominantly siloed and under resourced. The second reason is that most senior executives are gun shy from past poor experiences with large IT projects. Relatively low data and technology literacy of Boards and senior executives meant they were often caught out relying on others for very costly and poorly governed waterfall IT programs. Perversely this has made them overcautious in adopting next generation analytics applications despite the cost and utility advantages of cloud computing, processing power and open source tools.
Corinium: Who is topping the international leader board when it comes to data and predictive analytics?
John Studley, PwC: Probably not who you think. The leaders tend to be in the heavy industries including oil and gas, mining, rail, aeronautics and energy. They learnt the skills from the need to optimise highly calibrated equipment, prevent maintenance downtime and improve safety. They look forward and use data quite aggressively. I would say the most successful offshore retail banks are leading with Retail and Consumer organisations close behind them. But within each industry it is pretty mixed. In Australia, it’s mistakenly more fashionable to look back than to look forward. Count the number of staff producing valueless monthly reports and chasing their tails resolving ad hoc queries of what happened. In my view there’s a whole industry of unnecessary work out there collating aggregated non-actionable guff. I would stop that and redirect it to analytical insight.
It’s still difficult to find sufficient internal funding in Australia for serious data analytics innovation – which is why we are now at least two to three years behind.
Corinium: Why is it that big international retailers are a step ahead of Australia?
John Studley, PwC: Necessity is the mother of all invention. Where organisations operate in highly competitive markets you will find innovation to get ahead. Our market is smaller and less competitive with only two or three major players in each industry. That’s why we pay more for books, shoes and downloads. Bill Gates once predicted that the winners will be those that harness the power of information and do a better job of it than their competitors. And it’s simple, if you know more, then you can do more. Which is why the smarter organisations have invested significantly more in building their data analytics capability and trying some new things. The survey confirmed that it’s still difficult to find sufficient internal funding in Australia for serious data analytics innovation – which is why we are now at least two to three years behind.
Corinium: Within Australia what types of companies are really driving the data analytics agenda for improved performance that you have seen?
John Studley, PwC: The best innovation is coming from smaller organisations that are developing proprietary technology applications. They can move faster to develop and then partner with larger players to distribute or deploy. Let’s not forget the Amazons and Microsofts of this world have made the rampant acquisition of small innovators part of their strategy for decades. I have seen a few of the local banks investing here in building seriously good capability and like what the miners have done on remote operations and optimisation. Certain Government agencies are also leading which is very encouraging as they will become the role models. Everyone can do it, it just takes courage and leadership commitment to the opportunity data analytics provides for their customers and staff.
Corinium: People are often telling us that they are interested in learning more about the latest artificial intelligence technologies but are not sure how to apply them to their own business problems. What would be your advice for companies wanting to get started with advanced analytics and machine learning?
John Studley, PwC: My advice would be don’t wait, dive in straight away. Identify the one or two serious things that will make a difference and kick off a pilot. Iterate the solution and scale what works. Kill it after six weeks if you need to and start another. My brother told me story this week where five years ago he couldn’t decide on which particular type of investment property to buy. He realises now that it probably didn’t matter which one he picked as it would have been a great investment either way. I would say the same about advanced data analytics and machine learning. Find some partner organisations you trust to work with, pin your ears back and just get started.
Corinium: Thanks John. To find out more, visit: http://pwc.to/2cnHcq1
As more and more people within businesses talk about the value of data-driven insights, there are more C-suite level roles being created… different skillsets are required. And as this role gains popularity within the business, so too does the amount of pressure to deliver results – and quickly.
Corinium: Danielle, your presentation in Melbourne was entitled, “Championing Trust – Ensuring the CDAO Remains a Strategic Force.” You talked about the ‘perception of unabated trust’ around the CDAO – why do you think this exists?
Danielle Malone, PwC: They key point I addressed is unabated trust for people in these roles no longer exists, or is in decline. Historically, the Head of Analytics (for example) was valued for his/her technical prowess. As more and more people within businesses talk about the value of data-driven insights, there are more C-suite level roles being created. And as these newly created ‘c-suite’ roles emerge, different skillsets are required. And as this role gains popularity within the business, so too does the amount of pressure to deliver results – and quickly. This can be challenging for CDAOs within the business – how does one manage c-suite counterparts who expect fast results, when key elements of one’s role (e.g. data governance) takes time to get right. This challenges the concept of unabated trust.
Corinium: What strategies do you propose for CDAOs to better manage their trust networks across the organisation?
Danielle Malone, PwC: Quite simply, do not discount the importance of this. I regularly see people deprioritise the importance of building trust networks/gaining support for the long term (i.e. sponsorship), whether that be when they start out in a role, or are 1-2 years into it. It is easy to rely too heavily on technical capability to pull you through, or deprioritise networks before other things you may deem important.
To increase the odds for making it through the first two years of a c-suite role, relationship trust will be key. People will judge you on your behaviour, not your intentions. And this starts with great leadership – are you an enabler of progress, or true leader? I recently listened to a powerful podcast via Six Pixels of Separation titled ‘Super bosses with Sydney Finkelstein’ (can be found on the Stitcher app), and found it to be accurate in its description of how the right leadership can help foster organic and unabated trust both within your team, but across the organisation too.
And trust is a relationship built between two or more people. I have seen various tools of influence. I have witnessed the application of game theory in the context of working relationships – recognising and planning for the choice between co-operation and competition. In order to achieve a mutually productive outcome, you are better off co-ordinating strategies with those in your networks, because if each of you pursues the individual payoffs, one or both are likely to fail.
Another pursuit on trust is the concept of a Working Council. It’s an engagement model I have seen work to build trust and secure outcomes from others within the c-suite. It isn’t a general project council, or a project steering committee. It’s an enduring partnership between a number of wise investors. Investors in the success of data and analytics some might say. The information pack that I distributed to all attendees focuses on some practical points on how these may best be run within your organisations.
These are all very basic strategies, but in a busy world it is easy to place these things aside in favour of immediate deadlines.
Corinium: What are the common challenges faced by the CDAO?
Danielle Malone, PwC: The key word is ‘common’, because challenges are heavily dependent on tenure of the individual within the organisation, industry, organisation, or otherwise. With this in mind, common themes I see are:
- The right leader for the role
- Clarity of role/value proposition you will bring to the table
- Reporting structure
- Support for the long term (i.e. sponsorship)
- Budgetary responsibilities
- Ability to manage the pace of external drivers (e.g. regulatory change, digital expansion etc.