Are you burning money in the name of data?🔥
Are you burning money in the name of data?🔥
Hello,
I’m Ganes Kesari. I publish Our data-driven future to help understand how data shapes our world, explore key trends, and explain what they mean for you today. I speak and write to demystify data for organizational decision-makers.
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This newsletter will take you about 5 minutes to read.
I. Spotlight: Are you burning money in the name of data?🔥
“Only 30% of organizations align data strategy with their corporate strategy,” says McKinsey. Put another way, 70% of executives spend their money in areas that will not further their organizational goals.
Talk about burning money in the name of data.
Well, that could be a bit too harsh. While working with CDOs (Chief Data Officers), I’ve seen that teams struggle to pick the right strategic initiatives despite well-intended efforts. They are unsure which projects will deliver business outcomes.
So, how do you pick the most impactful AND strategically aligned initiatives to fund?
(Photo by Javier Allegue Barros on Unsplash)
Let’s say you are the Chief Analytics Officer at a media company. You have a budget of $1M earmarked for data initiatives for the year. Where would you spend it?
If you ask the data scientists, they might recommend pursuing federated learning. It’s the latest approach to training algorithms across distributed servers without exchanging data. It addresses data privacy concerns and could have business use.
On the other hand, the loudest complaints from business teams on the floor could give you different cues. They might ask for help with media planning to decide when and where to run their ads. Media-mix modeling is a popular approach to solve that.
However, none of these options may be the best.
In fact, these are recipes to put money into the 70% wasted bucket. Wonder why? The first approach is not business-outcome focused. Whereas the other prioritizes urgent problems over strategic ones.
What’s the best approach you must take?
Get your most important business and technology stakeholders together and ideate on the biggest challenges facing the organization. Ask them which users they must support first? Find out the user’s priorities and decisions that must be enabled.
Let’s say you run a discovery workshop and come up with a bunch of great ideas:
Help the sales team improve customer acquisition by 10%
Help content teams accelerate content creation from 30 days to 20 days
Help people teams increase employee satisfaction and engagement by 5%
Now, we are talking business impact. Each of these initiatives addresses a core business problem for a defined set of users. Quantify the projected ROI in terms of impact on the top-line or bottom-line.
The next step is to check alignment with corporate strategy. Find out if these initiatives really add up to the organizational goals. With the above three options, the choice isn’t really between customers, content, or employees.
You must prioritize the most important problem(s) that must be solved this year. Using your corporate strategy as a guide will help pick the best option(s).
Before you greenlight the initiatives, you must assess feasibility. Do you have the data, tools, and skills needed to execute the projects, or can you acquire them? This is the stage when you bring technology into the picture.
Remember, energies are limited, budgets are finite, and organizational needs are dynamic. Picking the most impactful and aligned business initiatives also means that you must take a hard call on the projects you must shelve.
Michael Porter, an authority on modern corporate strategy, said that “the real essence of strategy is choosing what not to do.”
II. Industry Roundup:
1. AI will not transform healthcare rapidly, say Fei-Fei Li & Andrew Ng
63 minutes | Standford HAI | Fei-Fei Li, Andrew Ng
Despite recent big breakthroughs in drug discovery, the two AI experts believe that progress will be slow over the next few years. They point to poor quality data and a lack of data on human behavior as top reasons. They answer audience questions about the biggest healthcare problems to solve and areas we must prioritize.
2. New AI Regulations Are Coming. Is Your Organization Ready?
6 minutes | HBR | Andrew Burt
The US FTC and European commission have released new guidelines for AI and stringent penalties for non-compliance. There are three ways your organization can be prepared: a) conduct impact assessment of AI risks, b) plan independent review by external experts, and c) schedule a continuous, ongoing review of systems.
3. Bank’s use of AI triples in the last three years
3 minutes | PYMNTS
The share of banks using AI has grown three-fold in three years, from 5% in 2018 to 16% now. Apart from fraud detection, banks use AI for credit risk management. Not surprisingly, 88% of financial institutions (FI) consider that the pandemic has worsened lending and credit risk. The research explores how FIs are using AI.
III. From my Desk:
1. Forbes: Collective Intelligence Is About To Disrupt Your Strategy: Are You Ready?
Superminds are everywhere, and they have disruptive potential. For this article, I spoke with Prof. Thomas Malone of the MIT Center for Collective Intelligence. He shares a 4-step approach to use collective intelligence for strategic decision-making.
2. Whiteboard: How should you build a data roadmap for your business?
How can you assess your data maturity and use it as a starting point to build out your roadmap? I share a step-by-step approach to do that and reveal the five critical dimensions in this journey.
Have you seen this cool viz of a US elevation map doing the rounds? I didn't realize that the Western part of the US had so many mountains 😲
Thank you for subscribing and reading the newsletter. I appreciate your attention,
Ganes.
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