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CEO as the Top Data Dog
by Laura Patterson, President, VisionEdge Marketing

 
       
   

Gary Loveman, CEO of Harrah’s Entertainment, Inc. is attributed with saying “Do you think or do you know?” He tells us that his job as the CEO is not to have all the answers, but to be able to ask the “penetrating, disturbing and occasionally almost offensive questions.”  The days of shooting from the hip and/or driving by instinct are pretty much over; the business environment is just too dynamic. Companies are now faced with betting their future on investments on a strategic direction.  Given the competitive environment, the importance of organizational performance, and the impact of decisions on the long-term, fact-based decision making has become increasingly important.  Corporate decision making is the domain of executive management team.  Therefore, today’s CEOs need to be the top data dogs in the organization.

What does it mean to be a fact-based organization?  Organizations that utilize fact-based decisions attempt to gather all the data and then use objective techniques to evaluate that information in order to make the decisions. Fact-based decision-makers use an analytical approach to justify decisions.  Fact-based decision making depends on quality data, strong analytics skills, and measurement systems that provide real information. 

In fact, analytics are the foundation of fact-based decision making.  According to Jeanne Harris, director of research at the Accenture Institute for High Performance Business, “analytics fundamentally change the way people behave and make decisions.” Accenture found that that those companies who have implemented analytics and an analytics culture in their organization were much more likely to have outperformed their industry peers in terms of revenue growth, profitability, and shareholder return based on analyzing 400 companies that had adopted analytics.

As the top data dog, the CEO models the way and should encourage every member of the organization to implement a fact-based decision making process.  This process typically entails four phases:  measurement, insights, analysis, and action.  Measurement includes gathering and compiling the relevant data, developing the appropriate metrics and key performance indicators, and then measuring results.  Once the data is collected it needs to be analyzed and turned into information that can be easily understood by the organization.  This information serves as the foundation for the third phase, insight.   The Insight phase is where the information is interpreted in order to capture key facts and learnings that can be used to make the decisions.  Once the decisions are made, it is time to take action.  This process is often used by the more analytical parts of the organization, such as logistics, development, manufacturing, and finance.  However, with top line revenue growth continuing to be a priority initiative for many companies, the marketing and sales organizations need to transform into fact-based organizations. 

The two organizations in particular tend to make many decisions based on experience and intuition rather than data.  As the top data dog, the CEO should expect the sales and marketing teams to become more analytically oriented. As a first step in this transformation, the CEO should ask each organization to have a data master.  Both organizations need people who are responsible for capturing and analyzing data, from market trends and competitive intelligence, to customer buying processes and preferences.  These people should be able to develop appropriate data collection and analysis processes, and use a variety of methods to track and report both results. These people should be able to collect, organize and present both quantitative and qualitative data to their management and leadership teams in such a way as to facilitate fact-based decisions.

The number of possible directional options can be overwhelming.  And while it will always come down to a judgment call, judgment enhanced by data is better.  Fact-based decision making enables a company to shift from intuition and emotion driven decisions to data-driven decisions. Data are the key ingredients needed to empower people to develop new insights about customers’ needs and expectations and competitor’s strengths. By deploying a systematic approach to data and data analysis, the CEO and the leadership team can acquire the necessary information and insights needed to understand the challenges and opportunities facing a business and use these insights to enhance decision making and set a course of action.

       
   
 
       
   

The Author

Laura Patterson

Marketing Metrics in Action

Laura Patterson is president and co-founder of VisionEdge Marketing, Inc, a recognized leader in enabling organizations to leverage data and analytics to facilitate marketing accountability and operations, measure and improve marketing performance, develop dashboards, and enhance marketing and sales alignment in order to accelerate revenue  and create a competitive advantage. For more information, go to www.visionedgemarketing.com.  Laura’s newest book, Marketing Metrics In Action:  Creating a Performance-Driven Marketing Organization, provides a useful primer for improving marketing measurement and performance.

VisionEdge Marketing enables organizations to leverage data and analytics to facilitate marketing accountability and operations, measure and improve marketing performance, develop dashboards, and enhance marketing and sales alignment in order to accelerate revenue  and create a competitive advantage. For more information, go to www.visionedgemarketing.com.

 
       
   
 
       
   
Many more articles in VisionEdge Marketing and Marketing Insight in The CEO Refresher Archives
 
       
   
 
       
   
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Copyright 2008 by Laura Patterson. All rights reserved.

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