The recent article by Carl Anderson and Michael Li, The Five Building Blocks for a Data-Driven Culture, does an excellent job of listing the essential attributes that define a organizational culture driven by data. Their five key blocks essential are having;
A Single Source of Truth
A Data Dictionary
Broad Data Access.
They also illustrate the significant financial advantages of having a data-driven culture.
The studies they reference show that data-driven organizations have 5-6% higher output than their less data-driven counterparts and similarly, using analytics on the data they develop data-driven firms enjoy an enviable return on their investment, around $13.00 for every dollar spent.
The old adage that the devil is in the detail still holds true.
But detail has been redefined –
Data is the new detail.
Anderson and Li wrote from the perspective of data guys, guys with an excellent understanding of the ingredients that contribute to the recipe for a data-driven culture. I know what this means. I cut my professional teeth in a company that compiled, licensed and repurposed data as its primary source of business. The file my team and I built is now the national consumer database for the largest credit bureau in the world. But I was not a data guy at heart – not then anyway. My background is industrial psychology. I grew up in a very different part of the forest.
Few words in business are uttered as frequently, and at the same time used inaccurately, as the word team.
The purpose of this article is to follow on to Anderson and Li’s good thought but from the perspective of organizational design. This article details the requirements to construct, and importance of having, a top-functioning team. First though, top performing teams are designed, they are not ad hoc collections of workers handed a task. A high performance team has to be designed and built using very specific criteria. When done right the work group is energized, focused, coordinated and enabled to deliver results. It’s similar to building a wall; the blocks are essential, but they need a plan, mortar and the right configuration of people to complete the project. This article covers these topics and expands upon Anderson and Li by adding the missing ingredient – The Team. Few words in business are uttered as frequently and at the same time used inaccurately as the word team.
First things first. What separates the extremely good organizations or very high performing-individuals from the very best - those at the top of the list, the winners? How much better are the NBA Champions than their closest challenger? How much better is the class Valedictorian than the second best? Upon quick reflection, most people say 15% or 20% or more. People often mistakenly think there are large quantitative differences between the top - the winners, and the next in line. The truth of the matter is the difference is small. Usually not even 10 %. For example, in 2017 Golden State out performed the Cavs in field goals by a little over 7%. Not much.
My first hard nosed CPA boss growled at me one morning after turning in what I thought was top notch work, “Look,” he said, “anybody can do the first 90%. Next time you deliver work, I want 100%. Got it?” “Yes sir,” I replied. Those six words, changed my orientation to work. It goes the same for a team.
“Anybody can do the first 90%”
When doing staff work such as coding, editing, speechwriting, research, data analytics, it is a solo work effort. The work continues until it is done. Getting work from a group of people, and forming a team, is an entirely different undertaking. With people we get personalities, competency ranges, skill sets, personal problems, personnel problems, performance problems, scheduling problems, ego problems, leadership problems – this list becomes very long we move from one person doing the work to many people doing the work. Most groups or poorly structured collections of well-meaning people can get the first 80 - 90% done. The best teams deliver the last 5 -10%. This marginal improvement is the difference between winners and losers. There is however, a formula to improve the odds of success.
Look at this example of a successful team (not in the data business). This was an exciting project. These guys were risk takers, speed freaks, thrill seekers, top-notch thinkers and high performers. They would be the first to fly a plane to the edge of Earth’s atmosphere, return to earth with a safe landing and then repeat the feat in 24 hours. The prize for their achievement was, $10,000,000.00.
To achieve this victory, a team needed to be designed, developed and installed. The team needed to have drive, focus, a wide range of skills and they needed to rally around a clear goal. A team must have three parts, plus a leader. Below is the formula for this team – any team.
Part #1: A Common Goal - well-understood and documented e.g., fly to 49,169 feet in altitude, return to earth and land horizontally, repeat in 24 hours.
Part #2: A Shared Reward, clearly defined and everyone gets part of the same reward e.g., $10,000,000.00
Part #3: A work group composed of individuals with diverse but complimentary skill sets e.g., mechanical engineers, pilots, material scientists, metallurgists, and so forth.
With all of three parts there is a team; without them, just a work group.
So let’s design and build a team, using the building blocks of a data culture data and deliver outstanding results (common goal) and share the thrill of victory and reward. The data business is not as sexy as flying experimental aircraft, but for us nerds, still a really good time. This is a true story and the names have been changed to protect the lawyers.
Our company was a data company. Data was our business. We had the all building blocks for a data culture in place. We were also planning to sell our company. We had determined an exit price. Our target was a very peppy multiple of our EBITDA. To hit this number the company had to improve our sales trajectory, launch a few new products and spend less than it had been. Our productivity had to increase. Our financial productivity had to increase. We needed better balance sheet efficiency. We had time, more than 18 months, but the starting gun had been fired and time was now our enemy.
My new unit had to develop, produce and deliver one of several new data products and, the team was not yet formed. We had people but the organization structure needed adjusting. That is, some new folks were needed and some of the existing staff needed to go or assume new roles. There were many “change conversations” and lots of HR activity. One of these change conversations stands out above the rest.
We’ll call the other person in my conversation Leon. Leon was a terrific performer, but now in the wrong job. Leon had been with us for 15 years. Leon ran an IT shop and ran it well. But the newly formed unit needed a new IT shop with completely different hardware, new search-based software, new network configurations, route diversity, route redundancy (lots of the stuff you get today from Cloud-based providers). Unbeknownst to Leon, he was going to be given a brand new job and his old job was going to be given to the new kid – a brash and hard-charging new hire exuding “new job energy.” Diverse and complimentary skill sets were required and so was change.
The conversation with Leon was predictably uncomfortable. When Leon learned that his old job, his budget and most of his people were being reassigned to Mel (the new kid), the anger radiated out of Leon like heat from a toaster. The conversation, though long, went kind of like this.
Me: “I know you’re not happy with this change, but this is the right spot for you. Intellectually this is a perfect fit for you. Trust me…Really…. You are going to be responsible for building our database and assuring that its content is accurate and publishable. Bla, Bla Bla. Let’s meet on this topic one year from today. You will be a happier employee and you will be earning more money.”
Leon: “I don’t think you know what you’re doing and by the way, Mel isn’t going to make it. He’s to rough around the edges. He doesn’t know our culture. He won’t fit in.”
We moved a few more pieces on the chessboard and designed and implemented a much stronger organization with an impressive variety of skill sets. We had a number of good analysts, a sharp network person (Mel), a very diligent and focused database team (run by Leon), a slew of hardcore propeller heads and fantastic marketing and sales people. The staff complimented each other really well and we had highly diverse backgrounds.
It was now time for the entire organization to be made aware of the Company’s goal – to be sold. Angst and uncertainty set in immediately…. what would happen to poor little old me… most people wondered? That was until we detailed the reward, the shared reward. Everybody was scheduled to receive a piece of the deal - from the man with the broom to the women in the corner offices. After that was made clear, magic happened, or at least it looked and felt like magic. That EBITDA target was now front of mind from top to bottom. VP’s turned it into departmental goals, managers drove the figures down another level and supervisors did the same. Everyone knew their numbers and the big number. The performance was reported regularly. That is, data was shared. In my unit it was on large TV screens that changed in real time. We were watching our own basketball game as we were playing it. We were all pumped and focused and worked like we were in a drumline. It was impressive to see, and it produced results.
We sold the company for 30 times EBITDA or 10 times revenue and it would not have had that level of success without a strong team orientation riding on the backbone of a data-driven culture. The two factors, combined, created a lot of value.
Leon and I met a year later and he said to me, “As much as I wanted to tell you that you were wrong. You were eerily correct. I never saw this coming and certainly never thought it would work. I really like my new job and this content stuff. Thank you.
When you are building your Data-driven culture remember, your IT person is not your database person. Your IT person is not your analytics person. Your network person is not your applications person. Your hardware person is not your cloud-based solutions provider. Your help desk person is not your data compiler. If you want a data culture, get out the blocks and study them. Perform a needs assessment. Get the right staff – full time or guns for hire. Then, implement the recipe for an effective team. You’re likely to get 15:1 on your money.