To quote Silberzahn and Jones “Despite formidable developments in business strategy over the last fifty years, organizations keep being disrupted by events they should have seen coming, but didn’t, or by events they saw coming but were unable to avoid or take advantage of.” We may in a future Blog pick up on Silberzahn and Jones’ assertion that that “strategy making is more a craft, or an art, than a science” however his point that it pays to “understand the limits of your knowledge” is a door into this blog on “big data” – a theme that continues to run across a spectrum of commentaries. A focus on exploiting Big Data can help us understand better the NOW and provide a more robust foundation for Directors to address their obligations to provide enterprises with strategic direction – and thereby improve overall Corporate Governance. We complement Silberzahn and Jones’ arguments with a hypothesis that not only is Enterprises view of the future imperfect, their knowledge of the current benefits attention!
Where to start?
Dominic Barton and David Court have recently argued in a Harvard Business Review Blog Getting Started with Big Data: Tie Strategy to Performance, that very broad collection of data and application of analytics is becoming a foundation for competitive differentiation. Moreover that this requires identification and management of multiple sources of data, the capacity to build advanced analytic models, and what amounts to a vision and sponsorship to transform the organization. So we argue that in the same way as Jack Welch used junior people to teach him about the internet, Directors should reach out to the individuals collecting and analyzing data to learn about what is there, what could be there, any embedded assumptions and how analytics can be used to develop actionable information and knowledge to improve the understanding of the “As Is” and current trends. That said when considering data and information we should recall a point made by Peter Drucker in his book Managing for Results (1964) “For business success, knowledge must first be meaningful to the customer in terms of satisfaction and value. Knowledge per se is useless in business; it is only effective through the contribution it makes outside the business – to customers, markets and end-users.” So lets strive to understand what the data and information means for meeting customer needs.
Also recently in the Harvard Business Review Blog, Sandy Penland flagged some of the obstacles to exploiting big data to see and predict human behavour. For example, just correlating the data is a challenge since the mega volume of data could generate a wealth of “statistically significant” answers to any question posed. That said, with such a wealth of potential insights – in for example social media (that could help us understand concerns and motivations of our staff) we sense that Directors have a duty to invest time in exploring options to use it to improve overall Corporate Governance.
Turning to the challenges of securing Corporate Data, David Menick of Deloitte has highlighted in Why Big Data Can Crush Traditional Information Security that “Historically, IT and information security teams have focused on protecting infrastructure, networks, and applications, often without understanding the business significance or sensitivity of the information within them…….” He argues that enterprises should take a review again the information they need to protect and prioritise for example trade secrets, personal information, records subject to retention requirements, or information subject to a legal hold and give this a level of security and governance control than the vast amounts of proprietary information organisations produce every day. This could be a reinvention of the approach used in organisations such as the military where there are multiple levels used with specific security requirements (and access controls / records). Bottom line is that in our emerging era of rapidly increasing analytics using rapidly growing mountains of data, there is just too much data for IT organizations to “take a blanket, one-size-fits-all approach to information security and governance”.
Here is the call to action ….. those responsible for Enterprises will be more effective in providing strategic direction if their Corporate Governance activities include a Strategic look at how the Enterprise can best exploit and safeguard the growing volumes of data available – efficiently, effectively and consistently.