How Data will fuel the Next Economy
I’d wager $50 that few of you reading this know who Clive Humby is.
However, I’d bet a (much lower) wager that you’re very familiar with his 2006 observation that “Data is the new oil”
Humby, an early founder of UK data consultancy dunnhumby, was one of the first to recognize a trend that has become an unshakeable foundation of business, nay our society, today.
The incontrovertible reality that data – thrown off by our customers, by our devices and by our businesses – is the jet fuel that powers our most successful organizations, that helps hone and refine the products and solutions of our most agile firms and, ultimately, creates the most customer-oriented businesses of our generation.
If the application of data is not hardwired into the very centre of your business it’s increasingly hard to see how your business will survive, let alone thrive, in the current environment.
We’ve all seen how COVID has accelerated many aspects of business strategy. Organizations that may have waited another quarter to initiate a digital transformation found themselves racing to address mission-critical requirements. Whether it was launching a Shopify site so they could transact online, releasing fuller functioning mobile applications or finding the urgent need to arm their workforce so they could work remotely, COVID became the accelerant for many languishing, but much needed, investments.
Equally COVID has shone a bright light on many inequalities between the “haves” and the “have-nots”. Stark lessons in financial and economic inequality. Tough lessons about who are the really essential workers and how much we really do rely on the lowly, minimum-wage worker stocking shelves, waiting tables or driving a long-distance truck.
If anything, COVID has shown all of us how critical the collection and the artful analysis of data is.
Contact tracing – made possible where I live in Canada through an incredible mobile app – is a phenomenal example of how the artful and sensitive collection and application of data is providing critical information to health care officials, and everyday Canadians, on a daily basis.
Artful and sensitive are, to my mind, the most critical aspects of any data strategy that an organization should be considering in the months and years ahead.
The collection and application of personal data creates a natural tension, some might argue battlefield, between organizations looking to build more data-driven and insightful products and the source of that data – the customers themselves. Organizations that aren’t abundantly clear about their data collection, data security and data analysis methodologies rightfully deserve the anger of Joe Consumer and the increasing ire of consumer protection groups and government regulators. To coin a much-used phrase, we really are all in this together.
It is no longer appropriate to have a data lake so enormous that you could literally drown in it. The days of collecting data just because you could, is no longer a viable business strategy. If you’re not drawing meaningful connections and insights from the data you’re collecting, that’s not just inefficient and ineffective, it borders on criminally negligent. More so, if you’re not using that data to uncover and build mutually beneficial networks where all participants benefit from the connections and collaborations made possible by that data, you’re likely missing one of the most interesting business trends emerging today.
It’s no longer appropriate to have scant regard for the deep and evolving nature of data privacy in all the jurisdictions you operate in. Google’s Sidewalk Labs experiment in Toronto faced tremendous backlash, and was ultimately abandoned, when Canadians citizens asked – quite reasonably I thought – why Canadian data was being reviewed, interpreted, analyzed and monetized by an American organization operating under a different set of data rules.
It’s no longer appropriate to take zero accountability for the veracity and accuracy of the data that your organization collects and monetizes. Just as organizations leverage data to make forecasts, allocate resources and make decisions, so to do customers and consumers leverage the data they are presented to make similar forecasts, allocations and decisions. As the consolidation and dissemination of data – in the form of news, opinions and facts – rests in an ever-decreasing set of organizations, there is an increasing responsibility for that data to be collected and disseminated in a responsible fashion.
As this article from The Economist eloquently outlines, the complete erosion of trust in institutions parallels the growth in social media as the principal source of news for most people across the globe. As I’ve commented on previously, having the news disseminated by organizations whose entire business is more lucrative when dissension reigns, is a existential threat we should all be paying much more attention to.
This explosion of data is creating an unprecedented opportunity to better understand the world around us and, subsequently, make better decisions about where and how we spend our finite resources and finite time.
For consumers this heightened awareness should cause us to ponder the viability of sharing economy applications that bring food and rides to our doors instantaneously while failing to pay a living wage to the “gig” workers providing the service. Or the environmental sustainability of business models that place hundreds more vehicles on the road (while paying no additional tax) just because it was vitally important we got our purchases in just 1-day. Our endless quest for instant gratification is a really slippery slope. While the sex appeal, and market valuation, of some of these sharing applications cannot be denied, I have to wonder if the simple act of kerbside pick-up isn’t the more socially and environmentally responsible act.
Equally, the deeper knowledge and insight now accessible to business should unleash a new crop of new and novel solutions.
Solutions able to create unique connections, collaborations and consumer benefits in an artful and elegant fashion.
Solutions that are genuinely customer-centric because the legitimate consumer concerns about data privacy are at the very heart of their design.
Solutions built on new and evolving business models that recognize that business has an accountability to not just shareholders but to society at large.
Data absolutely is the new oil.
What is it fuelling inside your business?
If you’re still debating just how critical data and data analysis is, I’d encourage you to read this phenomenal article from the Financial Times in the UK.
Author Peter Schwartz
https://www.linkedin.com/pulse/how-data-fuell-next-economy-peter-schwartz/?trackingId=gwKY9xiwmqqBlXoild3ozA%3D%3D