Data Leadership: The Key to Data Value

Data and business have become inseparable, so if your business isn’t using data effectively, you’re in trouble. Yet using it effectively can be a struggle. Not knowing how to find the right data, not trusting the available data, and not having confidence in the tools and people providing that data can lead people to conclude that “everything’s broken, and it’s all horrible,” according to consultant Anthony Algmin. But there is a solution: “If you’re sitting in a place like that, data leadership is the kind of thing that will help you get out of it,” he said.

What Is Data Leadership?

Algmin is the founder and CEO of Algmin Data Leadership and the author of the book Data Leadership: Stop Talking About Data and Start Making an Impact! “Data leadership is how we choose to apply our limited energy and resources toward creating data capabilities to influence our business,” he said in an interview with DATAVERSITY®.

Businesses continue to struggle with tying Data Management to business outcomes, so Algmin chose the term “data leadership” because, as a consultant, that’s what he saw lacking. His goal was to make the book something that could be read by literally anyone in the business, even those without a deep knowledge of Metadata Management, Master Data Management (MDM), or Data Quality.

Data Leadership and Data Governance

In an article in The Data Administration Newsletter titled Make an Impact: Data Governance’s Missing Piece, Algmin said that although Data Governance provides guidance, it does not inherently build momentum, which is exactly what data leadership is designed to do. Without data leadership, Data Governance programs start with much enthusiasm, only to become sidelined due to passive resistance or lack of real interest. Together, leadership and governance have a mutually beneficial relationship: “Data Governance is crucial to data leadership’s success – and data leadership might just be what saves your Data Governance efforts,” he said.

Data Value

Algmin said that the most important concept to understand is the notion of data value. The value of data lies in its ability to contribute to improvements in revenue, cost-effectiveness, or risk management. Data Governance in and of itself is not intrinsically motivating, but knowing that a particular practice or task is adding thousands of dollars a year in cost savings is a tangible motivation to continue doing it.

To calculate data value, examine an outcome that was achieved through the use of data, compare it to how the outcome would have been different without the use of data, then consider the cost to achieve that outcome. Courses of action can then be prioritized based on which will provide the most value to the company.

The Simple Virtuous Cycle

Data leadership is needed to provide momentum and propel the creation of value from the ground up and out to all corners of the enterprise. “It’s really about saying, ‘How do we create an engine that makes data value happen in the biggest way possible?’” Yet creating value in “the biggest way possible” often entails working on a smaller level, down to the individual. By finding a common language and a common understanding of how data creates something meaningful for the business, every person can start contributing.

He said it entails breaking down barriers, bringing people to the table and giving everyone permission to “get that problem figured out.” For this process, Algmin uses something called “The Simple Virtuous Cycle,” which is applicable at an individual level, an enterprise level, and everywhere in between. “It’s really about starting to measure — identifying places you may be able to make improvement — choosing, and then making those improvements happen,” he said.

The Process

Anyone from the CEO to the frontline employees can provide data leadership. “Wherever you start and whatever your vantage point is, data leadership is something you can do.” Every person across the company is encouraged to ask themselves:

“In this moment, what am I doing that could be measured? Where are the opportunities to create or increase data value?” In even the smallest context possible, he said, value can be created by asking something as simple as, “How can I give my manager an extra 15 minutes by automating this manual task or calculation?”

Algmin says that as individuals feel empowered to engage with the cycle, small improvements add up to more value and an economy of scale is reached.

  • Observe: Notice the process, the tools, the issues, and roadblocks
  • Understand: Determine how and why
  • Measure Current State: How long does this process take? How many steps are there? What is the cost?
  • Identify Possible Improvements: What could be done to remove roadblocks, speed the process, or automate?
  • Choose a Course of Action: Decide among the options (no matter how small) that can be done now
  • Implement: Test 
  • Measure Value Created: Find time or steps saved compared to current state

He considers the Simple Virtuous Cycle the best way to counteract entropy, allowing the business to become more nimble, more innovative, better with data, and better with internal change management. “If we can break down some of these artificial barriers between different groups in our business, and start to just work on solving problems together, leveraging the skillsets that we have, that will carry the day.”

The Data Leadership Framework

The Data Leadership Framework is composed of five categories, with five areas or disciplines in each category. Algmin says this framework helps achieve a balance between the people, processes, technology, and data capabilities necessary to maximize data value.

  • Access – Prepare Data for Use: How do we find, reach, and have the ability to work with the data that we need?
    • Data Security
    • Data Architecture
    • Data Wrangling
    • Development
    • Support, Operations, and DevOps
  • Refinement – Optimize Data Potential: How do we ensure sufficient Data Quality for our use? Do we have the right master Data Strategy?
    • Metadata
    • Data Quality
    • Master Data
    • Enrichment
    • Curation
  • Adoption – Acting from Data Insights: How do we encourage participation?
    • Data Modeling and Warehousing
    • Analytics and Reporting
    • Interactive Dashboards and Visualizations
    • System Integration
    • Emerging Data Technologies
  • Impact – Maximize Business Outcomes: How do we validate, measure, and expand the true business outcomes that data is having?
    • Machine Learning and Artificial Intelligence
    • Measurements, Metrics, and KPIs
    • Regression Analysis and Predictive Modeling
    • Business Process Automation
    • Data Monetization
  • Alignment – Engage Stakeholders: What is missing on the people side? How can we extend it to other areas of the business?
    • Strategy, Standards, and Policies
    • Project and Program Management
    • Marketing and Communications
    • Organizational Training and Building Quantitative Culture
    • Regulatory Compliance

Creating Harmony by Connecting the Pipes

To avoid bottlenecks, the above categories should be in relative harmony with one another. Algmin likes to think about the flow of data like water flowing through a series of pipes. If data flows through pipes of varying sizes, it’s not going to be as efficient as it would be if the pipes were all about the same size. That’s the thinking behind the data leadership categories.

Overall, access capability should be relatively in line and about the same size as adoption capability, which should match up with refinement capability, impact capability, and alignment capability. “It all needs to work in harmony to create the best business impact.”

Bridging the Gap Between IT and the Business

The perception of IT’s role in the business is problematic if IT has just become a “function” as opposed to being strategically relevant to the business, and that’s why the system is broken, he said. To be successful with data, that has to change: “If IT is not a strategic part of our business, but we expect data to be, who are we kidding here?”

Algmin says that both IT and business need to re-learn how to engage with each other in an authentic collaboration. Bridging that gap entails moving away from the notion that the business defines what they want, and IT builds it for them. “We need to make sure that people are encouraged to listen, and to leverage people’s skillsets to make that happen. The way we do that is by tracking the data value.”

Coordination Creates Value

Data leadership is really about coordinating functions among people and managing change, he said. Data is certainly the form that it comes in, but it’s the coordination among people first, and then systems, and then data. “That’s where the value really gets created. That’s why we’re saying that everyone has a role in data leadership.” He sees this grassroots empowerment to improve as something that’s been traditionally overlooked. Everyone needs to know that they have an opportunity to use data better in their sphere, to contribute to the overall good of the organization and affect real business outcomes, he said. “We’ve seen the evidence, and I know that it can transform careers, it can transform businesses, it can transform industries.”