What’s the purpose of data collection?

According to Anthony Algmin, a luminary in the art of data leadership, "There is no value in data unless you're creating change." For that reason, leaders should continually ask, “What do we need to change now, and what metrics do we need to focus attention on to spur that change?”

“Data informs what we can understand about what is going on in a business. It’s the closest thing we have to the truth. But it’s what you do with that understanding. Data is a change agent.”

- Anthony Algmin, Algmin Data Leadership

Anthony is currently the Convergence Platform Program Lead at AbbVie, where his team is developing a massive data analytics platform to transform how R&D develops new medicines. Anthony has led data transformations in private equity and across many sectors, working as a data architect, chief data officer, author, and entrepreneur. He hosts the podcast Data Leadership Lessons, teaches courses at DATAVERSITY (worth checking out at dataversity.net), and authored the groundbreaking book: Data Leadership: Stop Talking About Data and Start Making an Impact!

Watch the YouTube video, listen to the podcast, or read the highlights below.

Key Takeaways:


 

Data-Justified is NOT the Same as Data-Driven

“Being data-driven means being curious about the world around you, seeing what the data is telling you. If you already have a hard view, the data isn’t going to tell you anything.” –Anthony Algmin

Much like using a hammer as a paperweight, companies routinely misuse their data.

For example, do you tend to seek out data that supports your decisions, or do you start with the data, and let the insights drive your decisions?

According to the science of decision-making, or “behavioral economics,” as humans we are susceptible to biases, blind spots, and bounded rationality (Deloitte, 2012). Recognizing this universal trait, leaders need to use tools that anchor decisions in reality. “When it comes to making smarter, more informed decisions, big data represents a potential windfall – but only if you know what to do with it” (Deloitte, 2012, p.4). One of the best habits leaders can adopt is to suspend decisions and look at the data first, rather than retrospectively. When making decisions, your order of operations is often the difference between progress and missteps.

HubSpot Video

In a Complex Data Environment, Start with the Basics

“It starts with a flashlight. Data shines a light; it helps you better understand the core nature of your business. You may not know the exact problem, but just quantifying what is happening, just bringing it to peoples’ attention, helps.”- Anthony Algmin

From the data warehouse to the data “lakehouse”, to artificial intelligence and machine learning, to data fabric, governance, and cleanrooms ... the list of tools and buzzwords is dizzying. In fact, data’s complexity and rapid evolution have prompted the creation of entire data glossaries (Prater, 2021).

So how can we reconcile data jargon with our everyday business operations? In his experience, Anthony has found that simple-sounding data terminology often belies the complexity underneath. People want an easy button and are drawn to shiny data objects and glossy marketing, but the truth is that successful data solutions at scale require intention and effort.

To be sure, new tools are increasingly making data more accessible, but until we can command a sentient computer to “make it so,” we must construct each link in the chain, from the data source to the employee’s eyeballs.

"Your best bet in terms of amount of effort or amount of investment is probably still in the basics. If you don't have really clean transactional sales information, customer information, vendor, and inventory (the basics of your core business operations), if that's not all taken care of. I don't know that I'm going to entrust that to AI and machine learning models." -Anthony Algmin

While your organization may not yet have the horsepower to achieve data mastery, you can take steps toward becoming a data-driven organization.

Anthony recommends getting the biggest bang for your buck by starting with the basics – data quality and health. This aligns with current best practices; New Vantage’s 2022 Data and AI Leadership Executive Survey found that the primary data investments are in data platforms and data quality/health (New Vantage, 2022). 

2022 - Top data investments(Source: New Vantage Partners, 2022)

Organizations can improve data quality by improving the processes that produce, for example, reliable customer, sales, and vendor information in their CRM.

Often the best way to accomplish this is to surface reporting that highlights the gaps and flaws in the data. Exposing those reports to the sales team, their manager, and the executives heightens the sense of team accountability, resulting in better data-entry compliance. Once clean, that data is easier to integrate into a data warehouse or lake.

Once your organization lays a solid data foundation, you are better positioned to leverage data in more impactful ways, such as through AI and ML. (More on that in our Expert Insights Interview with CTO Andy Scott or here Artificial Intelligence - Stop Tripping Over Dollars to Pick Up Dimes.)

HubSpot Video

Start Data Projects by Defining the ROI

“Like any innovation, there is a leap of faith. But if you can’t at least quantify the cost of the system and desired ROI, that’s a problem. At the strategic level, one should be able to say, ‘Here is what we can expect to change by using this system.’ (Data initiatives) must be rooted in reality.” –Anthony Algmin

Successful data initiatives start with strategic scoping. Scoping includes defining the expected project cost, duration, outcomes, and the desired ROI. Without it, projects are destined to produce mediocre results, while well-scoped and executed BI projects constitute an add-back investment. (Listen to Trace3’s Vice President of IT, Tania DiCostanzo's take on the essentials of BI project execution.)

When scoping a potential data initiative, Anthony recommends starting with organizational goals. Leaders should ask themselves, “What am I wanting to do differently? How will this change impact the business? Will it manage risk, reduce cost, drive innovation, or increase revenue?” By clearly defining the objectives, it’s much easier to keep the project on the tracks toward desired outcomes.

HubSpot Video

Connect with Anthony

Interested in connecting with Anthony? He welcomes the opportunity and can be reached here - LinkedIn. Anthony is currently revising his Data Leadership book to be less technical, more accessible, and tailored to executives. Look for its release in 2023. We’ve provided his recommended reading list in the Resources section below.

About Blue Margin

Blue Margin helps PE and mid-market companies quickly convert data into automated dashboards, the most efficient way to create company-wide accountability to the growth plan. We call it The Dashboard Effect, the title of our book and podcast. Our mission is to accelerate your value creation plan.

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Suzanne Rains

Written by Suzanne Rains

Suzanne Rains is a communications specialist at Blue Margin Inc. With a MA in Human Resources and BAs in Marketing and Management, Suzanne unites an understanding of human nature and a keen interest in industry research to author thought leadership articles for today’s business leaders.