I’m passionate about data and helping solve problems.
The former is the DNA of a business, the backbone of an organisation’s decision making (or at least it should be!), the real ‘gold’ a business owns. Data is everywhere. We create it on a daily basis, sometimes unknowingly. The ‘Internet of Things’ (IoT) has connected data generating devices, which are beginning to rule our world.
The latter is all about clarifying and simplifying, what appear to be, complex situations. As a transformational personal coach, I know the benefits of separating the important from the not-so important. What appears to be the issue initially, is often not the root cause. The real cause being unearthed through questioning and investigating, manifesting itself in a situation previously unseen or unknown.
In the last few years, I have been fortunate to align the 2 passions, creating a fantastic Venn diagram with a sweet spot in the middle. The sweet spot, for me, is competitive advantage. The competitive advantage is for businesses in being able to use actionable insights to make ‘needle moving’ decisions. For individuals, it is understanding the true drivers of the situation and ensuring clarity has been gained.
But how does this relate to a broken record player?
The sweet spot in my own personal Venn diagram has highlighted one question that reigns supreme and can be applied to both contexts.
The question in question, “What is the exam question you are trying to answer?”
The reason why this is such a prominent question, is because most individuals and businesses cannot succinctly answer it. And that worries me.
This question should be easily answered.
Executives and leaders have, unwittingly, kicked started initiatives and projects without defining it, to later ponder why true success was not achieved. But that should not be a surprise.
If you cannot define the question you are trying to answer, how will you know what success looks like?
There are so many subsequently questions, but a few key ones include:
I hope it is becoming a little bit clearer as to why, I start with the exam question discussion. Every project I am involved with, I want it to be a success. But if we don’t know where we are heading to, how can we achieve it?
The challenge comes when senior leaders initiate a large-scale project across multiple divisions without defining, and then communicating, the NUMBER ONE question that the project hopes to answer. The scenario is even worse, should there be multiple stakeholders all with a vested interest!
The initiatives set off at great pace and fanfare, with senior stakeholder support, and probably a few reputations leaning on it. But after a period of time, it is inevitable some issues will arise. Some of these, I will place a sportsman bet on, could have been avoided with a discussion or workshop prior to kick-off.
It is highly likely increased resources or funds will be thrown at the initiative, which will either fizzle out (due to project fatigue) or morph into a wider more elongated project than it set out to be. Success may have been achieved in part (hopefully), but I doubt all parties were satisfied with the outcome.Monty Python had it right with the sketch: “The 100 metre sprint for people with no sense of direction.”
The application to this story is that the company set off at great speed, wanting to achieve but not knowing the direction they needed to go to achieve (win).
So, what is the alternative?
Here comes the Blockbuster and Netflix analogy.
Blockbuster Video were the market leaders. They cornered the market and, to my knowledge, were the major player in movie rentals. The company did very well and grew sizably. They employed all the traditional models for growth and appeared to be a sustainable, well managed business. All seemed to be going well, until technology kick started the wave of digital disruption and the wheels began to fall off.
In the meantime, Reed Hastings had been formulating a business idea which revolved significantly on utilizing data and actionable insights. His business would use a subscription model and take advantage of internet downloads, but the real secret sauce was his use of data.
Reed noted that if you were an action movie fan, who’s favourite actor was Arnold Schwarzenegger, the chances were you wanted to watch all his films. However, when you went into Blockbuster, the movies were organized by charts and genres. It was impossible to find all the Arnie movies and even if you could, there was a possibility someone else had rented the one copy available.
The exam question for Reed Hastings was ‘How can I provide access to a customer’s favourite movies, regardless of how they searched?’
As a result, Reed used data to create a huge movie database which included data fields such as actor, genre, ratings etc. From this, he could specifically target customers based on their viewing habits.
Not surprisingly, the business took off and was very successful. He was fortunate to have the idea at the time of internet growth but he, most definitely, had a clear articulation of his ‘exam question’.
Conversely, Blockbuster struggled.
The reasons for this are predominantly two-fold. Firstly, they ignored technology and thought the internet was a ‘flash in the pan’ thing. Secondly, they did not have a clear idea of their exam question.
What were Blockbuster trying to achieve?
Could they offer hard copy rentals in the same volume as Netflix? Unlikely. Were they aiming for a smaller niche in providing walk-in renting? Possibly. Did they ignore technology and then react far too slowly? Most definitely.
There was no clarity in their exam question. And I would not be surprised if the leadership were unclear at the time as well.
Blockbuster Video should have been the market leaders of movie rentals. Moving to an online model, leveraging all the data they had collected from customers and providing targeted marketing would have given them incredible competitive advantage.
Instead, they chose to ignore technology rather than identify the best parts of other industries and apply them to their model. In turn, they were slow and reactive and subsequently went out of business.
You may ask how is this relevant to a non-movie-based business?
The answer has 3 parts.
Firstly, any business should be very conscious of using the data they have available to maintain or generate competitive advantage. Data is the life blood of the business and provides incredible insights if you are looking at it in the right focus. Just like a magnifying glass, with the focus is blurry, you will miss key insights.
The business needs to define what they are trying to achieve, along with their exam question(s).
This is simply, the company’s ‘data strategy’.
Secondly, use the lifeblood of your business to support or challenge your decision making. Far too often, significant business decisions are made on gut feelings. These are likely to be either lucky, or wrong.
Why guess, when you can adopt a data-driven approach? The insights gained from your data can support or challenge a hypothesis, potentially saving huge amounts of incorrect or unnecessary investment. Better to have some facts to fall back on and use other factors to support these findings.
This is the becoming a ‘data-driven organization’.
Thirdly, the business needs to innovate. More accurately, the business needs to be aware of innovation and potential challenges. The failure to review new ideas and methods in other industries, means the business is already on the back foot.
Just because Financial Services is using Blockchain technology doesn’t mean the Construction industry should. But it would be foolish to not consider it’s application in the construction industry, in some way shape or form.
The answer may not be apparent now but having an awareness of ‘what is out there’ means you will not be blind-sided like Blockbuster.
This is true innovation.
Fourthly, notice if the playing field changes. Technology has caused huge disruption to many industries with knock-on wide-reaching effects. One example of this is the rise of the mobile, remote, agile workforce. Highly sought-after skills are now increasingly shunning the 9am to 5pm office life for a positive work/life balance on their own schedule.
Moving the workforce to a gig economy or freelance model may not suit every business but ignoring the directional flow of skills would be naive. Would it not be better to assess, in detail, the pros and cons of such workers, identify opportunities and see if they can be aligned to the business, rather than just casting them aside?
This is looking after you most valuable asset.
The world is changing at an ever-increasing rate. Darwin’s theory of ‘Survival of the Fittest’ now rings true more so than ever. The theory does not care if you are in the sports industry or pharmaceuticals, construction or media.
The biggest question a company faces at the moment is, do you want to be Blockbuster Video or Netflix?
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