What do you mean you don’t have the data?!?!?

Hi Brian

It all seems so simple and logical. But is it really that simple? Let’s see how your six tests stand up to closer enquiry. Let’s see if companies are winning the ‘Brian Vellmure Challenge”:

#1: If you don’t have the data, then you can’t have the right information.
Companies have been collecting data for ever. Each passing day results in them collecting more of it. Cumulatively, that is a lot of data. Mostly transactional data and more recently, a wee bit of social data too. But most companies don’t have much of the most useful data at all. Their social data doesn’t include their real social networks. They have little contextual data. And they know practically nothing about what customers really want. And you know what, most companies aren’t even trying to gather this data. So they automatically fail your first test.

#2: If you don’t have the right information, you can’t derive any meaningful insights from it.
Even having data isn’t all that helpful if you don’t derive meaningful insights from it. Even with lots of the wrong data, most companies do a pretty good job here. Those with lots and lots of transactional data are pretty sophisticated at analytics. Airlines use it to predict which customers are likely to miss a return leg of a journey. Supermarkets to make individualised offers to customers and telcos to identify what impact it will have on their calling community if a customer defects. Social data is more complicated but they are making steady progress. So the best companies pass this test with flying colours.

#3: If you don’t derive any meaningful insights, you can’t create a competitive strategy.
This is where it all starts to go pear shaped. Having worked with some of the most advanced, supermarkets and telcos, only supermarkets like the legendary Tesco really use data to drive their strategy. Airlines live and die by (perishable seat) yield management rather than by customer management. And telcos hardly use their insights about customers to drive strategy, outside of trying to spot customers at risk of defection (rather than doing anything to stop then wanting to defect in the first place!!! So a mixed result for this test.

PS. Let’s leave the question about whether you should even base your strategy heavily on data, as you suggest, to another discussion.

#4: If you can’t create a competitive strategy, you can’t create a solid work plan.
Out of the frying pan and into the fire. Even if a company uses data to create a strategy, there is absolutely no guarantee that it will be effectively implemented. Or even if it COULD BE implemented! And therein lies the problem with data-based strategy formulation. Without a thorough understanding of other stuff such as the company’s resources, capabilities and operating model, and how they collectively create value, there is no chance that a strategy can be implemented as intended. Some companies have this detail, but most do not. Don’t confuse the heat of strategy formulation with the light of implementing the right competitive strategy. Another test fluffed!

#5: If you can’t create a solid work plan, you can’t execute.
Test #4 identified that most companies don’t have the right approach to strategy formulation and fail to execute as a result. Some of this is due to the disconnects in the implementation process that Parasuraman, Zeithaml & Berry identified in their work on the Gaps Model described in the 1990s. But some is due to the fact that static strategies are obsolete the moment the ink is dry on them. Strategy in today’s hyper-competitive markets is about building a portfolio of options and matching dynamic capabilities, and then adapting them quickly as conditions change, rather than implementing strategic plans. This time it is the test that is in the wrong.

#6: If you can’t execute, well… you’re done.
No matter what data, analytics, strategy and plans you do or don’t have, execution is everything. If the customer thinks your delivery is a peach, it is a peach. If they think it is a lemon, well. And if they don’t like it, there are plenty of ways in which they can let everyone know before finding a better alternative. If the customer is king, delivery is all those servants that put the smile on their right royal faces. So do most companies deliver? Sadly, no! As Bain & Co found out in their study on Closing the Delivery Gap, there is an enormous difference between how well executives think they are doing and customers’ perception of whether it works for them. Even the social greats, like Zappos can so easily mess things up when they take their eyes off what’s best for customers. All in all, most companies fail this test too.

Most companies probably fail most of the six tests you set in the Brian Vellmure Challenge. The collect the wrong data, they do a better job at analysing it, but they don’t use it to drive strategy, they fail to implement the strategy, they develop the wrong kind of plans and they fail customers as a result. It just goes to show; in theory there is little difference between theory and practice, but in practice there is a huge difference.

You know it makes sense.

Graham Hill
Customer-centric Entrepreneur
@grahamhill