Companies in the data space — which leaders are realizing is every company — can follow a tried and tested formula for success. Strip away all the complexities of digital transformation: technical architecture, data pipelines, change management, and there is one golden egg that is repeatedly proving its value: brand new data.
Every evangelist in the technical industry is preaching correctly that data is a company's greatest asset. Forward-thinking business leaders are embracing digital transformation to convert legacy systems into modern architectures, and they're doing this by finding intelligent ways to put their big data to use.
But in data as in life, size isn’t everything. Companies don't need to be Facebooks or Googles, with their huge data collections, to be able to make profitable moves within their industries. There's a formula that even the smallest start-ups can intentionally follow: find your industry's golden egg and use it to discover new ways to pivot.
The greatest treasures don't always look like gold at first glance. One example of this comes from Seth Stevens-Davidowitz's book Everybody Lies: Big Data, New Data, and What the Internet Can Tell Us About Who We Really Are. Seth describes how equine-turned-data analyst Jeff Seder predicted the unexpected success of American Pharoah, the first horse to win the Grand Slam of Thoroughbred racing.
Seder spent years measuring nostrils, noises, and movements, even creating his own tools to allow him to measure horses' internal organs which hadn't been possible before. He eventually found his golden egg in the correlation between the size of the heart and performance on the racecourse. His creativity and persistence paid off, allowing him to be the first to make surprising yet data-based decisions in an industry that traditionally relied on instinct and experience.
Business leaders can replicate this success in their own markets. What tools does your company need to use or build in order to find your industry's undiscovered treasure? And having identified it, what dynamic moves can you make that might typically run counter to previous thinking?
Winners in the digital transformation and data space are entrepreneurial by necessity. Trial and error, and therefore failure, is part of the package. You might end up analyzing a nostril before you discover the gold, but the magic comes from fitting the pieces together to create the big picture. Seder likened the criteria he found for predicting a great horse to the musical notes of a symphony: “If you throw notes together, you're not going to get a symphony. Same with elite horses. Everything they do is fixed together in a pattern that works, and there's more than one pattern that works.”
Leaders need to be brave and experimental in the technical revolution. Start-ups have the advantage of being able to go digital from the outset, but many legacy companies have not yet made investments in machine learning and artificial intelligence to allow them to take a fully data-driven approach to decision making. They should make a start.
Executives can take heart that this is often easier than they imagine; much data collection is potentially automatic, as companies frequently sit on top of piles of data they either don't realize or don't utilize. By working creatively internally or with a consulting partner, they should hit the sweet spot by exploring new avenues for data collection and combining the results with their existing data sets to start composing their own lucrative symphonies.
As consumers increasingly expect more advanced features and products — digital services, online solutions, personalized products, and social community — companies are finding new ways to make these easier to identify, build, and maintain in order to curate a customer base that is loyal and a reputation that is sophisticated and on-trend.
Digital transformation allows businesses to do this by discovering new insights. Big data is an asset, but to dismiss smaller data sets is to leave money and opportunity on the table. If leaders are able to create an atmosphere of creativity within their organizations, they and their teams can gain the confidence to make bold, data-driven choices and move ahead of competitors whose reliance on conventional wisdom is already seeing them fall behind.
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