A recent McKinsey & Company global survey found that the success of a company’s analytic efforts depends, to a great deal, on key C-suite involvement.
The days of “leading with your gut” are essentially over. Instead, business leaders know that the road to success runs through data collection and analytics, yet many companies still feel that they are having mixed results when it comes to these functions. What makes the difference between those companies that succeed and those that lag behind? Leadership at the highest level.
McKinsey & Company recently published a survey, “The need to lead in data and analytics,” that acknowledges the value executives place on collecting and analyzing data and the concerns and issues they have. For example, although 86% indicated that their organizations have only been somewhat successful at “meeting the primary objective of their data and analytics programs,” one-quarter of that number say they’ve been ineffective.
The survey measures the very different results between high-performing and low-performing companies. What it reveals, quite clearly, is how important significant involvement at the senior executive level can be when it comes to data and analytics activities.
- 25% of high-performing companies feel that ensuring senior management involvement is the most significant reason for their effective performance while just 7% ranked an appropriate organizational structure to support analytics activities as a reason for their success.
- 25% of low-performing companies indicated that the lack of an appropriate organizational structure is the biggest challenge to an effective data and analytics performance yet only 6% ranked ensuring senior management involvement as a challenge.
This shows the disparity regarding the understanding of how senior executive involvement is essentially the glue that holds all of the stakeholders and initiatives together. It is their encouragement that makes the difference as can be seen in other findings. For instance, when it comes to sponsorship at the highest level:
- 44% of high-performing companies said that most initiatives are sponsored by the CEO; only 16% of low-performing organizations make that claim.
- Low-performing companies depend more on initiative sponsorship from executives directly below the CEO (46%); that number is significantly lower for high-performing companies (23%).
The result of this encouragement and involvement at the highest level is obvious when measuring advanced data and analytics capabilities; high-performers outrank low-performer consistently, as one would expect. But the difference is striking:
- Data that’s accessible across the organization: high performers – 64%; low performers – 33%
- Tools and expertise to work with unstructured real-time data: high performers – 59%; low performers – 12%
- Advanced modeling techniques: high performers – 40%; low performers – 18%
Many companies feel that implementing automation and digitization in their processes and functions is a valuable step on the way to profitability. And it is…technology increases efficiencies, reduces costs, removes friction between parties, and eliminates the errors inherent in paper and manual involvement. But to actually move towards revenue and customer growth, technology isn’t enough. You need the invaluable information derived from analyzing volumes of data to make strategic decisions. Getting not just buy-in but actual sponsorship and involvement at the CEO level makes success much likelier