Reflections and Lessons Learned
The world has dramatically changed over the past 20 years; there’s no question about it. The way we communicate, run a business, and make decisions are nothing like it used to be. What helped get businesses to where they are today, won’t take them into the future.
Rick Davis, VP, Global Data Governance at The Kellogg Company, presented his personal experience with keeping up at the Chief Analytics Officer Forum. His keynote was appropriately titled, “Thriving in a Changing World,” and represented the perspective from a company that initially failed to keep up as the world was experiencing a digital revolution and consumer preferences were rapidly changing. While certainly not alone, the Kellogg’s example provides valuable lessons learned for traditional companies and inspiration for how to get started with enterprise digital transformation.
Today, data is disrupting the world. The most successful companies are data-obsessed, leveraging data as the primary competitive advantage. Companies need to learn to think differently to evolve and disrupt the processes that are inside out. The fact that nearly 9 of every 10 Fortune 500 companies in 1955 no longer remain demonstrates that the level of of market disruption and churn over the last 61 years (Kellogg’s is one of just 60 companies that has remained on the list). Instead, disruptive data-driven companies like Uber (the world’s largest taxi company that owns no taxis) and Airbnb (the world’s largest accommodations provider that has no real estate) are dominating and disrupting their industries. Industry leaders are doing business completely differently than the market leaders of the past because they are data obsessed.
The Old Rules No Longer Apply
The rules that made companies successful over the last 100 years no longer apply in today’s digital world. As an example, Kellogg’s began as a company who sold a single product, Corn Flakes cereal, back in 1906. The company grew massively over the next 100 years, becoming the second largest snack food company in the world, selling a wide range of products in over 180 countries. The company was in the business of manufacturing for massive scale. Now the trend toward individual and unique offerings has significantly diminished the need for scale in manufacturing. Many traditional companies are built for scale, not for individuality, so a massive shift in the way they operate was needed. In the case of Kellogg’s, they needed a better understanding of what customers really wanted in a snack product by using data to analyze consumer preferences and behaviors.
Another major shift for traditional companies is scale in advertising. Brands can no longer just launch a TV ad to the masses to sell a product. Kellogg’s had the resources and capital to be effective at this 20 years ago. However, this has all changed, as consumer’s tolerance for irrelevant advertising is at an all-time low. In today’s omni-channel world, consumers expect advertising to be personalized. They expect brands to truly understand their needs by reaching them at the right time, with the right message, and the right communication channel. Companies today must segment their audiences with behavioral, demographic, and psychographic data (at the very minimum) and reach audiences across many digital channels.
Finally, the notion that ROI rules all decision making is a practice that no longer applies to successful companies. If you wait to predict the ROI of taking action, you are probably too late. To win today, you have to place a few bets to be successful. Davis discussed examples of how the need to show ROI can actually set a company back because the window of opportunity is missed in the process. Today, predictive analytics can be used to make fact-based decisions in real-time, without waiting on traditional ROI models.
The Way Forward
There are many ways that data and analytics can move the enterprise forward to meet the needs of today’s digital consumer. The first step is making data a priority and accepting the need to shift to a consumer-first, data-driven culture. The analytics mindset has to be ubiquitous in the organization. Intellectual curiosity is key; companies need people who question why things are done a certain why. Often the biggest opportunities lie in the places where the C-suite aren’t even thinking about. As Davis eloquently stated in his keynote, the ability to connect seemingly unrelated objects to understand the details can result in fireworks.