In a recent CIO Journal article, Is There a Leadership Vacuum for Big Data?, my fellow guest columnist Tom Davenport reflected on whether institutions should appoint a dedicated executive to oversee their company-wide big data and analytics initiatives, and if so, which C-level senior executives should such a position report to. His column was motivated by a 2012 Deloitte survey he was personally involved with of over 75 companies.
About 80 percent of the participating companies said that they were already using big data and analytics to a greater or lesser extent. With few exceptions, all companies expected that these initiative will become more important to their organizations over the next three years. But, the responsibility for the initiatives was all over the map, being managed by a variety of executives and functions.
“An ongoing matter of debate among data analytics practitioners is whether or not analytics should be a more centralized function or one that is embedded within various corporate work streams and geographies,” notes the Deloitte survey . “The opinions are as varied as the companies and industries involved.”
“If Big Data and analytics are the powerful business resource that I think they are, they need someone to champion and oversee their usage in organizations. The problem is that many organizations don’t really have someone in charge of these capabilities. There is, in many companies, a leadership vacuum for Big Data and analytics.”
How should companies organize complex, company-wide transformative initiatives like big data and analytics? This is a subject I’ve thought a lot about over the years, given my personal experiences with such initiatives at IBM, including the Internet, Linux, and On Demand. In their early phases, the impact of such an initiative on the company and on markets in general is not clear. Will it fulfill its early promise or fizzle out? If the former, how long will it likely take? And, will its impact be company-wide or confined primarily to one unit or function?
While often driven by a disruptive technology, the transformative impact of such initiatives typically goes way beyond technology, giving rise to new market strategies and business models. In some cases, their biggest impact is on the very culture of the organization. That’s why they don’t generally fit within an existing operating unit whose objectives and responsibilities are relatively well defined. In their early years, transformative initiatives generally cut across divisions and lines of business and require talent from different parts of the company.
In its wide scope and potential impact, big data and analytics most remind me of the rise of the Internet and World Wide Web in the mid 1990s. At the time, a lot was starting to happen around the Internet, but it was not clear where things were heading, and in particular what the implications would be to the world of business. As is the case with big data today, while the Internet was full of promise, there was considerable hype around it as well. It was all very exciting, but it was not always clear what people were really excited about. Was it real, hype, or something in between?
In the fall of 1995, IBM decided to embrace the Internet and make it the centerpiece of its overall strategic vision. To coordinate the efforts across the company, IBM’s then Chairman and CEO Lou Gerstner created the Internet Division and asked me to lead it, reporting to John M. Thompson, head of IBM’s Software Group and one of the company’s top business strategists.
We organized the Internet Division as a virtual company-wide team, with a relatively small staff reporting directly to me who worked closely with a larger number of people across the various IBM units. I had relatively frequent meetings with Mr. Gerstner and his executive management team, where I reported on the progress being made across the company as well as on key issues that required their attention.
We were very focused on establishing an early market presence, including highly visible experimental web sites like those supporting the Grammy Awards and the 1996 Atlanta Summer Olympics, as well as joint projects with clients such as LL Beans’s first e-commerce site. From these prototypes we learned a lot about requirements for new products and services as well as extensions to existing ones, which were subsequently implemented by the appropriate business units.
Our biggest challenge was figuring out IBM’s overall Internet strategy. Why should our clients embrace the Internet? How is it transforming their particular industry? And, what would be its overall impact on IBM’s operations and business model?
A major part of our job involved marketing and communications. As part of the hype of the dot-com era, many were saying that in the Internet-based new economy, startups had an inherent advantage over existing companies, whose legacy assets, including their IT infrastructure, were no longer relevant, would slow them down and make it hard for them to compete.
To counter these messages, we carefully analyzed what was going on in the marketplace and worked closely with many clients around the world. Our clients told us that their business operations were totally dependent on the IT infrastructures that they had built up over many years at great effort and expense. They saw no possible way to replace their infrastructure, as many were advising them to do, and the expenses involved would be prohibitive. They were happy to embrace the new, innovative capabilities of the Internet, but it had to be done in an evolutionary way that leveraged their existing processes and IT infrastructure.
Their input was critical to what became our e-business strategy, which we succinctly described as Web + IT. Our
basic message was that every
business, - large and small, new and mature, - would benefit from embracing the universal
reach and connectivity of the Internet, not just startups. The
brand reputation, installed customer base and IT infrastructures that
companies had built over the years would be even more valuable assets
when combined with the new Web capabilities.
We made our point by showcasing concrete cases, across a variety of industries, where customers had integrated the Internet with their existing capabilities and carefully explained both why and how they did it. While our position was not very popular at the height of the dot-com hype, once the bubble burst a few years later, it was clear that we had developed the right strategy and had given our customer the right advice.
In addition to working closely with clients and other external stakeholders, - universities, research labs, press, and IT and financial analysts, - we spent considerable efforts within the company, so our own people could understand what the Internet was all about, what new products and services they should be developing, and, most important, to help them embrace the new culture that typically accompanies disruptive, transformative initiatives like the Internet.
Success for us meant that the Internet Division could eventually go quietly away and no one would miss it because our job was done. This was the case in December, 1999. You no longer needed a central group coordinating activities across the company because the various divisions had integrated the Internet into their normal operations and it was now business-as-usual for them.
While every case is different, let me conclude by reflecting on some key lessons from my experiences with the Internet Division that might now apply to big data and analytics?
First of all, I totally agree with Tom Davenport that you need a full time senior executive to champion and oversee the initiative across the company. There are many technical, marketing and business issues to work out in the startup phase of a potentially transformative initiative, and its near impossible to do so on a part-time basis.
Second, regardless of the reporting structure, any major company-wide initiative must have the strong and visible support of the CEO and other top executives in the company. The initiative must be carefully nurtured and protected in its early phases until it’s strong enough to stand on its own. In any organization, there is a natural competition for resources between new ventures and the existing lines of business. Human nature being what it is, managers in the existing units will often feel that any new investments are best given to them to grow their businesses, rather than invested in a new, unproven area. This is one of the many challenges that leaders of the new initiative must skillfully navigate, otherwise the inevitable cultural and political – that is, human – issues will slow them down and potentially kill the new venture.
Organizing and managing transformative initiatives is hard. If not properly handled, the innovation intended to disrupt competitors in the marketplace will end up turning against you and disrupting your own people and organization. But if handled well, the innovation will prove to be a very effective way to bring the whole institution into the future in as smooth a manner as possible.
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