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Transforming the organization through data and analytics – the role of culture and OCM
How does a Chief Data Officer effectively establish a data culture in an organization, enabling ongoing business value to be derived from its data assets and analytical insights? Only 20-30% of CDOs are successful at achieving this goal, according to Bean (2019).
What are the critical success factors that, if appropriately addressed, will lead to sustainable wins for the business? Is a good data strategy all that is needed in order to guarantee the ongoing success of an enterprise data and analytics transformation program?
A solid data strategy is, of course, important. On the other hand, it has been observed that “culture eats strategy for breakfast” (Drucker, cited by Campbell et al. 2011).
Recent studies have shown that there are other factors that must be given equal attention, and key amongst these are culture and organizational change management (‘OCM’).
MISSING THE BOAT WITH REGARD TO CULTURE AND OCM
In their 8th annual survey of senior executives regarding data and how organizations extract value from it, NewVantage Partners (2020:2) found that there is little emphasis on “initiatives devoted to changing human attitudes and behaviors around data”. This is in spite of the fact that more than 90% of those surveyed knew “that the challenges to becoming data-driven are in people, process, and culture—not technology”.
Rollings et al. (2019) notes that a key challenge in forging a data-driven organization may have to do with the data and analytics leaders themselves not recognizing the need to “become an enterprise engine of value creation”; or, if they do recognize the need, not having the tools and experience to derive the value from the data. In addition, these authors highlight culture and data literacy as “the top two roadblocks for data and analytics leaders” and they recommend prioritizing cultural change and fostering a data-driven orientation.
Brown et al. (2013) recommends that senior leadership teams educate themselves in the state of the art of data analytics. They advocate a senior leadership workshop focused on the question: “Where could data analytics deliver quantum leaps in performance?” This discussion should be led by a member of the C-suite who has the authority and influence supported by an Organizational Change Management expert in order to galvanize the stakeholder community into action with an insight to the organization change levers that will be necessary to ensure success. The belief is that sponsorship from the top team ensures that there will be sufficient motivation to ensure that organizational behavior changes not only occur, but also persist.
But what happens in cases where the changes are not fully adopted by the rest of the workforce? Are there alternative approaches to culture and organizational change management that focus on weaving the changes permanently into the operational fabric? It seems that the CDO community as a whole has not mastered a comprehensive approach for harnessing culture and OCM into its success.
Perhaps a reason why culture has not been adequately addressed is that it is a big subject, so let’s unpack it. Schein (2010) thinks about organizational culture (‘OC’) at 3 levels: (1) company practices and behaviors, (2) explicit statements of values and beliefs, (3) deeply held, basic assumptions and beliefs. The third level is where the true essence of OC resides.
The cultural milieu of an organization is a complex multi-layered phenomenon, often guided by shared beliefs and assumptions, which in turn influence core values, which in turn drive behavior patterns (e.g. perception, thinking, feeling and doing). In some organizations aspects of the culture are explicitly codified; in others they are unwritten and lurking below the surface. Sometimes an organization’s culture is homogeneous; other times we find many sub-cultures in the same organization, Martin (2002).
While it is often true that subcultures are a source for learning and innovation, Schein (2010), it is often also true that subcultures may impede or block innovation adoption, sometimes due simply to a “not invented here” attitude, or just due to a different cultural perspective. This is especially true where there is a history of distrust. In such cases leaders must focus on social interaction, trust, and motivation, Ferlie et al (2005).
An organization’s culture is often too complex to attempt to change at the macro level. It is better to focus on a specific organizational problem and to make adjustments to its associated cultural strands.
IN SEARCH OF A NEW MODEL
In the past, research has been done, and several models have been developed, to help guide companies to become data-driven and to establish a data culture. However, most of these studies seem to have focused on strategy, with very little in-depth attention being given to culture and organizational change management.
The savvy CDO is looking for a comprehensive framework that can be used as a thinking tool for mapping out the organization’s transformative journey to becoming a data-driven enterprise. Such a framework must be focused on business value and must include an incremental approach to OCM and culture. I strongly recommend that such an approach include the services of a seasoned OCM consultant to stack the deck in favor of generating the sought after ROI.