WHAT IS HAPPENING IN THE PICTURE:
Senior management is having a confused discussion about marketing-, sales- and/or perhaps the overall performance of the company. The different managers choose themselves what numbers to present and the CEO has no way of controlling their accuracy or relevance. The discussion is more detailed, and on a lower level, than what would be expected in a group of C-level executives. Most likely this management team spends much time in similar discussions, adding more confusion than clarity. They probably have some financial KPI’s which serve as the lowest common denominator that everyone can agree with.
WHY IS THIS HAPPENING:
-There’s a lack of relevant and clearly defined high level KPI’s.
-There’s no Single Source of Truth (i.e. verified data from one trusted source).
-There’s a lack of Data Democratization (different people have different access to different data in different systems, not based on actual needs but because there is no plan for how data should be utilised in the company).
WHAT CAN BE DONE:
First of all acknowledge the fact that decision making is ineffective due to the lack of decision support. Also acknowledge the need for resources, focus and time to solve this situation.
Define relevant high level KPI’s. Make sure to have both leading and lagging KPI’s. It’s a task for the managers themselves to define these KPI’s. Help might be needed, but the task as a whole should not be delegated to middle management as this will raise questions about managements capability to run the business (it’s like asking “What do I need to know to run the business?”, in a situation where you already are running the business). Also, start out small; quantity (many KPI’s) is not the answer.
After defining the KPI’s (which can be improved over time), work your way “backwards” towards the data; How should these KPI’s be presented/distributed, what analytics needs to be performed on the data in order to create/calculate these KPI’s and what data should be analysed in creating these KPI’s? It’s important to start from the business side (defining the KPI’s) – you don’t create KPI’s based on the data you have, you collect data based on the KPI’s you need.
Set up a team with representatives from Business, IT and Analytics. Do not automatically put the CIO/CTO in charge of this KPI-project. IT is an important part of the solutions, but having data turned into meaningful KPI’s, presented in an actionable way, goes beyond IT-infrastructure. In a mid-size/larger company you should have a CDO (Chief Data Officer) in charge of this project as well as your overall efforts to become a more data-driven company.
Be patient, pay attention to detail, work methodically and keep your eyes on the goal (the requested KPI’s). Rome wasn’t built in a day and neither is a management KPI-dashboard.
WHAT WILL BE THE RESULT
With the KPI’s in place, managers will have a common baseline of information. They will know how the company is performing and they will have an understanding of the underlying drivers. The KPI’s are continuously updated/available and consequently the meetings can now be about appropriate actions moving forward, instead of being about finding common ground for the discussion.
WHAT DOES THIS HAVE TO DO WITH DATA STRATEGY:
The quest for useful KPI’s will involve digging into a variety of source systems, scrutinising the handling/mishandling of data, coming up with uniform definitions, reviewing analytics- and visualisation skills in the company etc etc. and in doing all this you will come across different organisational- and technical silos. A strategy is a map to navigate this complexity and it’s also needed to be able to communicate, within the organisation, the motives to why things need to be done in a different way than before.
If the company has a big “data-debt” (your data assets has been neglected for a long time), that also means it will take a long time to get even the basics right. Without a strategic framework, a roadmap and a detailed action plan, priorities from daily operations will constantly get in the way of this time-consuming task and end results will suffer. In other words: You can only stick to the plan if you have a plan.