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Why analytics must be about change

This article was first published in the Institute of Water Journal

I am often asked what the latest and best insights from the sector’s data and analytics are. There is never a one size fits all response to this, and over the last year or so I have stopped talking about the robustness of the analytics or the quality of an insight. Instead, I now focus the discussion on what companies should do with the insight.

Analytics is not what we think it is about, it is not about software, it is not about data, it is not even about analysis but it is about change. If you don’t, or can’t, act on the insights derived from your analytics or technology programmes then the expenditure (in terms of resource, time and money) is wasted.

Chief Data Officers across multiple sectors are all facing exactly the same issues as we are in the water industry. Namely, how to demonstrate the ROI for data and how to get people to use the insights in the data to drive action.

When we think about successful companies maximising the benefits of their data we think of organisations like Facebook, Google and Amazon. Yet the reason they are so successful isn’t that they are amazing at analytics (although they are), but their ability to change internally and, in turn, to bring about change in their sectors based on the insights they have derived.

In the Disney Pixar films, Cars, the lead character, ‘Lightning McQueen’, becomes known in the first two films for his heroic hard graft and dedication which, in turn, helps him get to where he needs to be. However, in the third film he suddenly starts losing, and it is not because he is not working hard, it is that the game has changed. The other racers are using data and analytics and have achieved a step change in performance. Only by embracing change himself is our automotive hero able to compete with these new challengers.

It is the same in the water sector: every company has submitted a PR19 plan to Ofwat stating the critical role technology, analytics and insight will play in helping them transform performance. Yet to date, there is little consistent conversion of analytical insight into action and demonstrable performance improvement.

This is not just a UK issue. I have worked with 14 companies globally, developing over 85 insights that are so robust that they support a large-scale investment case, backed up by over 400 evidence-based and associated recommendations. However, less than 3% of those insights have been acted upon.

There are three things which seem to be stopping insight-led action:

  1. First, a lack of recognition from senior leaders that technology or analytics projects are just the beginning and that for every pound you spend on them you should be spending four or five more on helping the end users understand, incorporate and utilise the insight.
  2. Second, a lack of translation mechanism between the analytics and the business which is often personified by an internal story teller who can interpret the findings and recommendations into a language that resonates with the people impacted by the change.
  3. Third, the lack of empowerment and mobilisation of the marzipan layer, those individuals within an organisation who can galvanise people to action. They are unlikely to be the most senior people in the organisation and may not be the most vocal, but they will have the ability to influence large areas of the business to take action.

If the sector does not address these gaps and become more change orientated then we will end up being like Lightning McQueen at the start of Cars 3 and will not achieve the step changes in performance we know we are capable of and which customers are expecting.

Some companies are already doing this but all of us need to become agents for change and enable our organisations to harness the power of data and analytics to build a better, brighter future.

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