Written by Eddie Short, CDO, MidEuropa, Contributor to the Data Leaders Hub, Author of the Intelligence Business Newsletter.

It seems that the time for change has arrived. The advent of Large Language Models (LLMs) and intelligent chatbots such as GPT4 and ChatGPT from Open.AI is signaling that a new world order is approaching (like a hurricane). The reality is it’s time to disrupt or be disrupted!

The departure of AI Pioneer Geoffrey Hinton from Google and open letters on pausing AI development from Elon Musk et al. show that even those who are ‘in the know’ do not ‘know’ what is coming, other than it is going to lead to fundamental industry and possibly even societal change. The reality is it’s time to disrupt or be disrupted.

  • Whole industries from Healthcare to Legal, Consulting and Customer Care will be fundamentally changed and whilst new jobs will be created, many more (in the near term) will disappear, along with companies that are not able to harness the new capabilities.

  • Critically, this new ‘Industrial Revolution’ isn’t going to happen over a lifetime or a generation; rather, it’s going to happen between NOW and 2030!

  • This is, therefore, the time when companies who have a leader who can practice the Seven Habits of the Highly Effective CDO/CDAO are better placed than most. It will not be enough to have Tech leaders, Data Leaders and Transformation Leaders, but someone who understands, Data, AI, Tech and Transformation and can help the CEO and Executive to navigate a hugely accelerated period of Change!

To that end, from my own experience, when I’m introduced as the Data or AI guy, I typically get kicked two levels down the organisation to have a technical discussion about the merits of Machine Learning or Data Governance.  However, if I’m introduced as the ‘Change Agent’, who can help you harness the latest disruptive AI and Data capabilities and transform your business, I’m having a discussion with the CEO and Board Members.

  • Companies cannot afford to waste time with conversations 2 levels down. The speed of change that will be driven by Data and particularly AI means that there is no standing still. The winners will be those who embrace the capabilities and transform their businesses, whilst the losers will be blown away in the hurricane!

I have crystallised this as the transformation of an organisation into an Intelligent Business: one that uses insight to dynamically reconfigure itself in response to the expected needs of its customers and simultaneously anticipate and respond to changes and events in the external environment, i.e. an organisation that has truly embedded data and analytics capabilities into its organisational DNA.

Here’s how the Seven Habits of Chief Data & Analytics Officers (the CDAO) can help you become an intelligent business and critically an industry disrupter (and winner)!

Data is central to understanding your customers – what motivates them, what their needs are, and what they are inclined to buy (and for how much). Steve Jobs said: ‘My customers will know what they want when I show it to them…’.  Whilst Steve was an inspirational marketing genius, today, we can disrupt markets and industries by using predictive algorithms to work out what customers should want before they ask for it. Being ahead (but not too far ahead) of customer demands and turning those advanced requirements into customer needs is the unique combination of marketing, sales and data!

In addition to collecting great customer data, the real advent of ‘big data’ was the need to start to collect and leverage data from outside the organisation, including video, audio, social media etc. That data can be used to augment an understanding of customers and, in addition, central to understanding our external environment, competitors, and suppliers. GPT4 and ChatGPT, as well as art solutions such as Dall-E and MidJourney, show what is possible when you can train AI to leverage ‘all of the available’ data. Harnessing this data to again predict what can and should happen to your marketplace and customers allows the business to deliver real-time scenario planning.

In building your business model, it needs to be underpinned by an extendable data model. The data model should be built by looking at the value drivers of the organisation, which allows the creation of a KPI /Metric Model which gives an uninterrupted line of sight between your Level 1 Key Performance/Results Indicators (like Revenue, EBITDA, Free Cash Flow) you report to shareholders, and the underlying operational metrics of the business (customer lifetime value, cost of goods sold, employee costs etc.); as well as those critical sustainability and ESG metrics. Connecting this to Habits 1 and 2, you focus on where you want the business to be.  Management and Executive time is spent on working on potential course corrections, so they can be made as and when necessary, and hardly at all on the reporting of what happened because that is baked into your plan.

Data Governance has been seen as a problem and the enemy of successful data leaders, but in my opinion, risk and performance are two sides of the same data. If you have a single data model built in partnership with the rest of the business, you have the nirvana to manage risk, performance and sustainability. This integration of risk and performance, as two sides of the same data, is key.  As a business, you can manage so-called ‘offensive’ and ‘defensive’ strategies in parallel, driving your business forward at pace whilst ensuring that you are not caught out by compliance or regulatory failure.

The Intelligent Business operating model is one where data serves people and masters processes and technology.  Businesses need to redefine their operating model so they are not limited by the straitjacket of legacy ‘process models’ so that they can embrace a much more Agile approach. Processes will need to be dynamically reconfigured to meet the rapidly changing needs of customers and reconfigure what the business is delivering as Services.  Ultimately, the truly agile business cannot be dependent on standardised technology such as ERP, CRM, SCM systems from SAP, Salesforce, Oracle et al. You need Data and AI algorithms to drive the business, whose logic is unique to the needs of your business and customers. That logic and decisioning are removed from these monolithic platforms into your data-driven enterprise architecture, and over time you can retire those expensive platforms.

It’s all about people!! Whilst AI will fundamentally transform companies and industries, people will still be central to the companies that can differentiate themselves. If everyone uses ChatGPT, for example, we will rapidly coalesce on a set of identikit capabilities that are unlikely to be differentiated. Data rarely delivers value in isolation; it’s when it’s combined with other activities that it becomes an enabler and a multiplier of value creation. Three key communities need to be addressed. The first community are your (external) customers (mentioned in principle 1, Customer is King or Queen) – you must be using Data & AI to develop products and services that make a difference to the end customer. The second community is the people within the organisation – the whole concept of the Intelligent Business is to ensure that the Data in your business serves the people in your business to help them make better decisions, which improves service to the end customer and allows the organisation to deliver better revenues, lower costs and improved ESG outcomes. That means upskilling the whole business and developing, amongst other things, ‘citizen’ data scientists as well as ownership of data amongst the whole employee population. The third population is the Data & Analytics team themselves, and the job of the effective data leader is to create, grow and nurture a great team and provide them with exciting work that delivers transformational products and services for the other two populations.

Critically, your data strategy (including Analytics and AI) and, more importantly, the tactics and logistics you employ to execute it, combined with your people strategy, will be central to achieving your business purpose and will be the core pillars of any business strategy. The Data (& AI) enabled transformation will be the fundamental business change your business needs over the next 3-5 years. How your business (or organisation) chooses to differentiate and deliver sustainable competitive performance, data, and analytics capabilities will be Valuable, Rare, and Difficult to Imitate, and the Organisation therein will be both key to delivering that competitive performance as well as measuring and managing it. As I’ve noted before, Jeff Bezos built the strategy for Amazon based on the Flywheel from ‘Good to Great; and used Data, Analytics and AI to spin that Flywheel faster than any other company, allowing them to transform from an Online Bookseller, to the ‘Everything Store’ to a multi-industry market leader. To compete and to be a disrupter of your industry (and not a body on the roadside), you need a data strategy that spins your business strategy and the transformational plan and capabilities to execute it.

The reality is it’s time to disrupt or be disrupted. Are you elevating the role of leading Data and AI to the top table to help you ride this enormous wave, or does your business have data leadership 2 levels down and is prepared to risk being blown away in the coming hurricane?

The author of this article is Eddie Short, Chief Data Officer at MidEuropa, and a trusted contributor at Data Leaders. He publishes an independent, weekly newsletter The Intelligent Business via LinkedIn. Data Leaders members get early access to this newsletter every week via the Data Leaders Member Hub.

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