Digital data, its analysis and its use, is revolutionizing businesses of all types. According to an expert panel convened today by the New England Chapter of National Association of Corporate Directors, either you digitize or die.
What is it? It is the use of data to create competitive advantage by making internal operations efficient, by making sure you are producing the right kind of thing or service, and by removing the “friction” from the relationship between the company and its ultimate consumer/customer. It is how you connect your operations internally. It is how you figure out what the marketplace wants from you and tells you if you are in the wrong business or are not giving your buyer the optimal total service experience. It is promptly applying newest technologies to your business strategy. It is automating what you do. It is protecting the security of your, and your customer’s, information.
Who is doing this? Apple Pay, Uber, Disney, Pinterest, Amazon. Who has failed by not doing this? Travel agents ceding market to on-line booking; box retailers; Blockbuster, Polaroid, Circuit City. Data analysis needs to change two things to make your business survive: how you work inside to save cost and identify your deliverable, and how you present to your customers in a way that reduces friction by eliminating extra steps and to the greatest extent eliminates the entities that intermediate between company and customer.
What are the risks of implementation? Abuse of data (current Facebook problems are only the most recent) may lead to curtailing use rather than protecting proper use (Congress wants to investigate, per today’s Boston Globe), lack of Board of Director understanding, fear of taking a short-term profits hit while you take the time to absorb the costs and failures of embracing the robust use of data.
Millennials may help us, says NACD’s Directorship Magazine. They bring flexibility, embracing change, continuing training to bear. They also bring necessary confusion, challenge of preconceptions, and changing work environments and hours and the “gig” economy; all these things are part of redefining how work will be done in the future, something that boards of directors also must come to embrace. Boards better make their matrix of needed skills and make sure the right mix of people is leading their business of the future.