Never bring a hunch to a data fight.
If profitability were a matter of intuition, very few would get ahead. To outthink the competition, successful business leaders draw on experience, knowledge-based information and, increasingly, data-derived insight.
In a new report from Harvard Business Journal, nearly 700 business leaders were surveyed on how they use insight to unlock value. Their answers shed light on why some are more successful than others in the so-called Insight Economy, a term describing the growing reliance on creating, consuming and sharing data-driven insight to stay competitive.
The report, “Competing in the Insight Economy,” is headlined by these findings: 71 percent of business leaders are creating new forms of economic value from insight, 32 percent have monetized insight directly and 42 percent believe insight will be a significant contributor to company revenues over the next three years.
It’s an axiom of doing business in the cognitive era that great insights provoke great decisions. Throughout the report its subtext invites you, if you haven’t done so, to face the stinging truth that your intuition isn’t as trustworthy as it pretends to be. With more competitors embracing the strategic resource of data, acting on impulse now more than ever can pose an existential threat to your business.
In practice, the Insight Economy is just emerging. The report, drawing on experience from various industries including technology, manufacturing and financial services, shows only 15 percent take a comprehensive approach to consistently apply sophisticated analytics to diverse data sets. However, this small group is proving the enormous benefits of doing so.
We call them Insight Leaders.
How are Insight Leaders different? Insight is a significant contributor to their revenues. They put insight to work in nearly every decision, interaction and business process and turn it into tangible business value (e.g., increased sales, more successful product development, greater customer satisfaction, more efficient operations). The better the insight, experience shows, the greater the competitive edge.
Insight Leaders are empowered to act with confidence. They’re able to make better and faster decisions. More than three-quarters of Insight Leaders (77 percent) are confident in the quality of their decisions. Without insight, the story shifts dramatically. Other respondents describe their organization’s decision making as haphazard, inconsistent and inefficient. As one respondent described, when data is used, it is often to “support preconceived notions than to generate insight or challenge predetermined pathways.”
Finally, Insight Leaders often monetize insight directly as a product or service.
Of course, it all begs the immediate question: How can my business compete in this Insight Economy?
It’s easier said than done. Advanced data analytics is a particularly complex field where coherence can be a pesky matter, much less the revelation of actionable business intelligence. Thankfully, the common refrains found in this study provide a beginner’s guide to the Insight Economy.
How are Insight Leaders different?
- Take a strategic approach. Insight Leaders communicate a strategic commitment to an insight-based approach and put in place the people and processes to operationalize that strategy.
- Choose the right tools and techniques. Insight Leaders are twice as likely (84 percent) to have the right technology for effective data access and analysis.
- Invest in people. Insight Leaders are more likely to say their people have the right skills and understand which data and analytics generate insight.
- Believe sharing increases the value of insight. Insight needs to reach people who can act on it. Insight Leaders break down organizational silos that, according to 72 percent of respondents, are the top inhibitor to insight-based decision making.
- Commit to culture change. Insight Leaders establish a culture that values and trusts the creation and sharing of insight.
Undoubtedly, becoming an Insight Leader is less about acquiring more data than it is thinking and working in entirely new ways.