You need to figure out which camp your company falls into before you can even consider using business analytics to try to gain new actionable insight, argues Brian Sommer, CEO of strategy consultancy TechVentive and a research analyst with Vital Analysis.
The companies that are ossified are unwavering champions for the status quo, “so rigid in their world view, their processes and business practices that they choose to ignore the very suggestions that could save their firms. They’ve not only ossified, they’ve turned deaf, too,” he says.
- Don’t adapt to new market, customer and competitive realities
- Have problems changing because they lack leadership, vision and a continuous change capability
- Don’t have cultures that reward risk taking and change over risk avoidance and slavish adherence to ever-growing obsolete processes
If you can answer yes to the following questions, your organization may be ossified:
- Did it take forever for your organization to embrace Apple iPhones?
- Does executive leadership think cloud technology is too new to consider?
- Does the organization pride itself on being the one unchangeable, immovable rock in a sea of change?
Video rental firms, banks, big box electronic retailers and airlines are some of the firms that have been crippled by ossification.
Analytics technology will succeed in nimble firms that already listen to and respond to their markets, Sommer says.
“The gulf between the nimble and ossifying companies will only widen as the more nimble firms will use new technologies better than their more rigid counterparts,” he adds. “Great companies have employees (including top executives) that get out and play in traffic.”
Orbitz Worldwide Inc., for example, has used analytics to uncover the fact that people who use Apple Inc.’s Mac computers spend as much as 30% more a night on hotels. As a result, the online travel agency is starting to show them different, and sometimes costlier, travel options than Windows visitors see. This nimble company is using seemingly innocuous information – in this case the type of device used to access its site – to start predicting consumer tastes and buying behavior.
- Make it easy to communicate with them.
- Experiment. A nimble firm can refine its analytics to isolate experimental results from those of other markets. The insights from these experiments will guide the eventual rollout of game-changing new solutions/processes, etc.
- Have many current hypotheses about the market. They use analytics to test, prove/disprove and refine these hypotheses.
- Can scale fast. When they see new market opportunities, they test, refine and then use explosive energy to seize the awaiting market opportunities.
- Use analytics to optimize everything: sales, operations, tax positions, pricing, facility utilization, staffing, etc. Each of these results will require changes to processes, controls, responsibilities and more.
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