Tuesday, June 24, 2014

Resistors to Information-Driven Decision-Making

People, not all of whom are friends, tell me that I was an innovative community destination marketing (DMO) executive during my four-decade career in .

That’s sad, because two characteristics with which I am credited are still so rarely found: what we now call integrated marketing and the use of analytics for decision and strategy making.

Any credit due is because I worked under innovation-friendly governing boards in each of the three innovation-friendly communities I served.

Even today, still only 12% or 1-in-8 organizations globally qualify as “analytical innovators” according to a new survey by the MIT Sloan Management Review and North Carolina-based SAS Institute.

This means they thrive in an analytics-driven culture, mandated by senior management, which means endorsed by board policy. These organizations have groomed higher levels of analytic skills and here’s the kicker, they are deploying analytics for strategic advantage.

Strategic mindset and analytic skills are now more important for marketing executives than creativity according to executive search giant Spencer Stuart.

This is because, in the words of Tony Parker who heads up marketing for a company whose brands now touch 1-in-4 people globally every day, analytics enables and enhances creativity.

A strategic mindset from the board through its chief executive to every corner of an organization is a huge competitive advantage because deciding what to do as well as forecasting the best direction is all about evaluating tradeoffs.

Being driven by data-analytics-metrics is simply the best way to choose among tradeoffs.

So where do the vast majority of other organizations fall?  According to the study, nearly 6-in-10 are analytics wannabes.  They have an attitude of “oh yeah, that too” but they fail to deploy analytics as a “core asset.”

Fully a third of all organizations are “analytically challenged.” This means they rely more on just anecdotal experience and personal opinion and suffer from poor data and analytic management skills.

Half of the 78% that believe they need to be more innovative are held back by “analytically challenged” executives and governing boards.

Ironically, many data skeptics and resisters are also usually top performers personally, according to an analysis last month in Harvard Business Review dissecting the psychological resistance of those afraid of data-driven management.

This is why a friend of mine who consults with community destination marketing organizations like those I led got so much grief from sources he didn’t expect when he chastised DMO execs for being data-resistors.

Data enemies have high perceived but low actual performance.  Data friendlies are perceived low but are actually high performers.  Data skeptics fall in the quadrant of high perceived and high actual performance.

The authors found that those who resist data are what I would call “control freaks.”  They hold their organizations hostage because they fear data will show a better way than their experience alone and they will look bad or their organization and community will look backward.

Because of rotations and term limits, I probably worked with around 120 different board members during my career.  I say “with” because an executive only works “for” the board as a unit.

While the boards as a whole were data and innovation-friendly, there were at least ten members appointed who weren’t and many of those were high performers in their day job.

They were easy to spot.  While they endorsed board policies such as being data-driven, they usually worked in meetings to undermine, restrict or pooh-pooh data.

A couple were data cynics who made cheap shots by purporting that anything can be proved by data, perhaps saying more about how they use it than me as the target of their dispersion.

A few others were data-skeptics, some because neither their personal experience nor that of their employer valued analytics as a core asset.  Some just never grasped the difference between data, analytics, and metrics and how to weave them into a guiding organizational narrative.

A few even tried to pull the organization backward from best practices to outmoded regressive practices only because those were familiar and often because they had been siloed from best practices.

It worked a time or two until other board members realized the ramifications and we got back on track.

I’m less forgiving of executives who remain stuck in their heuristic ruts.  Studies find them even more common in marketing and media organizations where until four decades ago standard metrics were difficult to come by.

But many want to be data-driven, they just work for boards that don’t, ironically populated by the 3-out-4 of non-marketing execs who still struggle with believing that marketing can drive demand and revenue.

According to the study by MIT and SAS, there is a high correlation between an organization being an “analytic innovator” and being growth-oriented.

Maybe being growth oriented and “analytic friendly” should also become pre-qualifications for serving on boards.

Obviously they should already be for any executive.

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