The mandate of the Analytics Age executive is to utilize available insights to maximize corporate and shareholder value through insight-driven cost reductions, value discovery, and product or services innovation.
Bryant Avey, Chief Geek, internuntius
In any organizational transformation, the first step is to establish a global set of values. In the Analytics Age, there are 5 key imperatives that will help you set values for your insight-driven initiatives.
The geek-elite will remember the words of Star Trek’s Borg Collective: “Resistance is futile.” The same is true for business leaders revolting against the Analytics Age. Resistance is futile. Resistance to knowing more and doing more with that knowledge is the path to business obsolescence. Even so, the Stratalytigist still encounters executives resistant to the idea of implementing even the most basic analytics system. In those cases, a bit of anecdotal evidence might be preferred. Consider the following sad statistic: Over the last 20 years there has been a 35% increase in Fortune 1000 failures. These failures could be a result of poor capitalization, or any number of other factors, but what if the failures are a result of lack of knowledge? Blockbuster was a company that failed, filing for bankruptcy in 2010 because of challenges from companies like Redbox and Netflix. Conversely, in October of 2013, Netflix, a leader in the use of analytics, had to caution investors about their exuberance as share prices climbed 430% in a year from $55 to $330, posting the largest gain on the S&P 500. While Blockbuster was purchased by Dish Network in 2011, Netflix has continued to thrive, surpassing HBO in the number of subscribers with 33 million in 2014, and adding 10 million subscribers internationally.
As previously stated, the comparison between Blockbuster and its upstart rival Netflix is anecdotal. There were flaws in Blockbuster’s service model. They weren’t prepared for the economic crash of 2008. Nevertheless, Blockbuster’s primary failure lay in the company’s inability to keep customers connected. Understanding customer needs and wants has continued to serve Netflix well. Having conquered Blockbuster, they have since overtaken HBO’s subscriber base and are now producing content as part of their customer service offerings, using data from customer ratings and preferences. Even with the insight afforded by analytics, CEO Reed Hastings has had missteps, but Hastings’ willingness to pivot so that Netflix is customer-centric, rather than expecting the customer to reorient to the business is the epitome of an Analytics Age company. Without access to an analytics environment to gain insight, it would have been far more difficult for Netflix to reach the level of success it has achieved, or respond to customers as quickly and efficiently. Hastings acknowledged the role technology plays in achievement at a 2011 education summit saying, “Stone Age. Bronze Age. Iron Age. We define entire epics of humanity by the technology they use…”
Welcome to the Analytics Age where insight-driven companies like Netflix are already changing the playing field in their respective markets. Ultimately, there will be many more companies, like Blockbuster, that give way to insight-driven competitors simply because they don’t know what they don’t know. The 5 Imperatives of the Analytics Age can help you develop an Analytics Age strategy so that your company won’t be one of them.