I finally got around to unpacking that last box of stuff from our move last summer. I pulled out a pile of articles and reports I had written over the years—mostly when I was a senior executive at Accenture’s Institute for Strategic Change. What was on the top of the pile? “Capping the Gusher,” a management report on information strategy-how organizations leverage information to create value in a dynamic business environment.[*] Copyright date: 2001.
Of course I put the rest of the pile aside and sat down to read. I was curious about how information strategy and analytics had changed in the past 15 years, and I was prepared for a few laughs at how inexperienced we all were back then.
The first big surprise: some things haven’t changed at all. In 2001, 68 percent of the executives we interviewed claimed they had an “above average” information strategy compared to others in their industry. But when we dug a little deeper, we found that most didn’t actually have an explicit strategy for information, and neither did they know what their competitors were doing with information. A sizeable fraction confused information strategy with information technology strategy. I’d say that all this is still true today for many, dare I say most firms.
As they did 15 years ago, the customers we now work with on analytics have a reasonably good idea how they want to support their current business model with information. Depending on their overall business strategies, they use information to manage operations, control costs, optimize cross-selling, and so forth.
The second big surprise: the target has moved. Fifteen years ago, right-thinking organizations spent a lot of energy figuring out how to win against competitors. Well, competitors still occupy some mindshare today, but customers have come to dominate our strategies and our focus. That’s very different.
As customers have become more well-informed and demanding, organizations have put CRM information in the center of the operating model. Many are leveraging social media as well to build out customer personas with an intimate understanding of needs and behavior.
Our paradigm from 15 years ago suggested that an organization could put new product / service development, operational excellence, OR customer intimacy at the top of their strategic stack. I’d say that succeeding today demands customer intimacy AND one of the other two.
The third big surprise: the levers we recommended for gaining an edge in 2001 are still good advice today. And they’re more accessible and affordable than ever to both public and private sector organizations. Moreover, organizations are actually using these levers to great advantage.
- Shift the value chain focus. Fast fashion companies such as Zara have shifted from trying to forecast consumer taste to making their supply chains blindingly fast. Zara can deliver a new design to stores in three weeks instead of traditional retailers’ 12 months.[†] This achievement obviously relied on more than information, but information strategy was a critical component.
- Raise the analytic ante. NWN helped one state government’s Department of Social Services to improve results for foster children. By analyzing each county’s track record at meeting process deadlines the department was able to highlight the counties, courts, and individual judges who were allowing cases—and vulnerable children—to languish. Once the poor performers were visible to everyone, the process “magically” sped up.
- Integrate pervasively. Every industry has examples, from distance learning and telehealth to smart homes and machinery that diagnoses its own errors. Some hospitals and university campuses are now adopting HPE’s Meridian system that recognizes visitors when they arrive and uses their smart phones to guide them to their personal destinations. One state government is developing a state-wide identity for each resident so it can manage all the ways it interacts with citizens more coherently.
- Tune in for impact. The explosion of online analytics, brand reputation monitoring tools, and social media analysis have moved “tuning in” from nice to must-have. Leading financial service firms such as USAA are bringing social information together with demographic and financial information to profile customers and get ahead of their needs.
- Develop distinctive new information assets. Examples are legion. Yoshiki Obayashi, founder of Applied Academics LLC, has developed an investment model that protects investors from 2008-type meltdowns. With a little bit of your spit, Ancestry.com can tell you where you came from. One state public safety agency has developed a risk model that focuses field agents on the most urgent interventions.
Let’s be clear. All these wonderful examples notwithstanding, this is only the beginning. Information technologies have flourished over the past 15 years. Today they are powerful, friendly, affordable, and well within the reach of any organization. This creates a no-excuses environment for organizational leaders. It’s time to develop information strategies that deserve the name.
[*] “Capping the Gusher: Turning Information Torrents into Competitive Power,” Jane Linder, Edward Sarnowski, and Joyce Leung. Accenture Institute for Strategic Change.
[†] “Zara Leads in Fast Fashion,” Walter Loeb, Forbes, March 30, 2015. http://www.forbes.com/sites/walterloeb/2015/03/30/zara-leads-in-fast-fashion/#d24cb4261d7