The Emergence of the Analytical CEO

CEO leadership is needed to push analytics thinking


Having been an A’s fan during the Moneyball era; my wife and I watched the movie and kept asking each other do you remember going to this or that game. At the time we had no idea what was taking place in the A’s back office; we just knew we wanted to be part of a team with such a low payroll, kids drumming at every game, and an irrepressible will to win against the odds.

CEO leadership is needed to push analytics thinking

Analogous to Moneyball, it is becoming increasingly evident to me that analytics do not happen in a vacuum – it requires strong and focuses leadership. For an enterprise analytics approach to take hold and to grow there needs to be an orientation from the very top. Clearly, not all organizations need to have their chief analytics officer reporting directly to the CEO; but there should be bias toward data rather than gut feel. Otherwise, organizations end up with enterprise fiefdoms of information.

Last week, I was talking to two IT leaders for a major mutual fund company about the importance of analytics. While both agreed, they said that some managers still preferred to rely on intuition and experience versus data. Imagine that—the most data centric type of enterprise has managers preferring intuition over data. However, CEOs are starting to act as change agents here. Marc Benioff says, “I think for every company, the revolution in data science will fundamentally change how we run our businesses. Our greatest challenge is making sense out of data. We need a new generation of executives to understand and lead through data.”

Brian Cornell is a great case study

One of the vanguards of analytics is Brian Cornell; while in charge at Sam’s Club he used analytics to improve the unit’s customer-insight system. The results were so good that Wal-Mart moved all of their analytics teams under Cornell. According to Stuart Aitken, Cornell goes beyond the data and asks hard questions of customers and those on his team. His method involves taking the clues he gathers from customer conversations and using analytics to look for broader patterns that would reveal problems and opportunities.

Cornell’s emphasis on analytics was a key reason why Target board’s hired him. His record with analytics is amazing. This included his ability to use data to expand in house brands and reverse sales declines at each company that he worked for. At Sam’s Club, for example, he made it into the fastest growing division of Wal-Mart. Presently, Cornell is using data and analytics to look for areas where Target can reestablish it’s right to win.

Parting remarks

We are clearly at a change moment for CEOs. In the past, CEOs and their managers relied on backward facing reporting to drive forward facing performance. But today, timely data exists to drive forward facing performance—especially, if the analytics are placed on top of them to show connections and predict near term impacts. Whether it be for the front office or the back office, with great data—data which is trustworthy and timely—it is possible for CEOs and their leadership teams to truly captain the ship. It is possible with great data and a willingness to dig into what it represents to see the business icebergs ahead and to take not only corrective action, but to make use of the opportunities and trends that they represent. Clearly, with great data, analytical CEOs and their teams can develop strategies that can be the basis for new approaches to winning businesses.

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