The global consulting firm McKensey & Company has just published the results of its annual survey of global C-level executives across all industries on the impact of data analytics and “digital transformation” as a measure of business success.
The title is stark and to the point: Catch them if you can: How leaders in data and analytics have pulled ahead.
It is important to note that the term Artificial Intelligence (AI) in its many forms (machine learning, deep learning, virtual reality, visual recognition, vocal recognition, natural language processing etc.) is not referenced in the report. However, many synonyms for AI are referenced throughout.
The opening paragraph reads:
“While it may come as no surprise that data and analytics are reshaping industry competition and organizations’ core businesses at an accelerating pace, the persistently lackluster response to this phenomenon by most companies should raise some eyebrows. In our latest McKinsey Global Survey on the topic, respondents say that since our 2017 survey, the changes data and analytics have brought to their industries are growing in both magnitude and scope. Yet they also indicate that many of their companies are still responding to these shifts with ad hoc initiatives and one-off actions, rather than through long-term strategic adjustments that are required for sustainable success in an evolving business environment.”
For bottom line effect, the report states:
“According to the results, companies with the greatest overall growth in revenue and earnings receive a significant proportion of that boost from data and analytics. Respondents from these high-performing organizations are three times more likely than others to say their data and analytics initiatives have contributed at least 20 percent to earnings before interest and taxes (EBIT) over the past three years.”
How did these companies, even in traditional bricks and mortar industries, achieve such remarkable economic results?
“Above all, the responses from high performers indicate that their leaders are creating both data and analytics strategies for the long haul. These organizations are also making data a core part of employees’ work flows and mind-sets by educating them as part of a broader effort to build a strong data-driven culture. All the while, they are ensuring that high-quality data and modern technological foundations are in place to support these efforts at scale.”
Without question, “modern technological foundations” which drive this level of improved performance include AI in all its applications.
To achieve this level of success, data has become central, mindsets have shifted and culture is the measure of adopting to this rapidly evolving economic model in every industry. These leaders are developing marathon strategies for sustainability rather than focus on the next quarter’s economic performance. Data strategies emanate from the C-suite rather than isolated and unrelated IT applications.
A primary feature of these high performing companies is an enterprise wide educational strategy to lift employee awareness and competence in digital practices as well as the decision making which can be augmented by automation.
In short, to join this elite group of business athletes requires a comprehensive commitment to an organizational culture of flexible and agile change which is not the traditional approach to growth and sustainability. The long term perspective, rather the short term, is a common denominator.
It is critical to recognize that these data driven outliers do not see AI as a substitute for human judgment, but an enabler of it.
To achieve this high level of productivity, the leaders in every industry begin with a data driven strategy from the C-Suite and engage an enterprise wide culture management program to realize its potential. This level of leadership is about people first, and technology used to support them.
It was Steve Jobs who said, “Technology is not the solution, people are.”
Mr. Bridgesmith has over 40 years experience in legal professional services and numerous business ventures involving digital technologies. He has represented, trained, and consulted with organizations large and small in most industries. He is currently a Managing Partner of Accelerate InSite with a focus on AI Strategies and Implementation.