How Executive Power Struggles Impede Innovation
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Making a business digital-ready requires pooling data that was once under the ownership of a few executives, often turning digital growth into a game of politics.
At this point, it's apparent to just about every CIO that existing data silos must crumble. There's no way for an organization to tap the full potential of digital technology—and stay competitive—without creating data streams to fill data lakes. These are critical for everything from cross-selling and customer retention to regulatory adherence and call-center optimization.
The technical side of the equation is tough enough. A modern enterprise may need to pull data from 50 or 100 different systems or sources, including social media, IoT sensors and devices, and partner systems. Engineering these connections is a daunting proposition, even with growing libraries of APIs, cloud computing and data frameworks such as Hadoop.
But, as a recent McKinsey & Company article pointed out, the political side of the equation may be even more challenging. Bill Wiseman, a senior partner at the consulting firm, says that initiatives often include a "political cost" for business units.
An executive power struggle
"If you think about five executives, all vying for the next CEO job, they all want to retain as much of their own personal capital as they can to be able to succeed," he noted. "Sharing what they would perceive as proprietary information with some of their so-called competitors, which are obviously business units in the same organization, why would they want to do that?"
He goes onto say that control may actually equal benefits, including reducing—if not eliminating—the risk of data spillage. "That creates a new category of risk that executives never really wanted to face before," he added.
Stepping over these hurdles is nothing less than critical. There's a need to motivate and incentivize people to share. How can an organization tackle this challenge? Among other things, initiatives must tie into well-defined organizational metrics and KPIs. Individual compensation must tie into the overall framework as well.
But Wiseman says that it's important to move beyond an IT-led approach where people simply pull data. Too often, they arrive at insights that "aren't that interesting or aren't that believable. Trying to sell those into a business and convince the business to take advantage of those is sometimes a hard sell."
Instead, Wiseman suggests adopting a business-led approach. This, he says, involves approaching business leaders—CMOs, COOs and others—and allowing them to "shape how he or she wants to deploy that and what kind of insights to go and pull out and use."