In an article that appeared in Harvard Business Review (January 2006), Thomas H. Davenport explains how to become an analytics competitor: champion analytics from the top, create a single analytics initiative, focus on your analytics efforts, establish an analytics culture, hire the right people, and use the right technology (ies). He later co-authored Competing on Analytics: The New Science of Winning with Jeanne G. Harris, published by Harvard Business School Press (2007).
To read my interview of Davenport, please click here.
Note: He is now in the process of completing a second interview.
To determine whether or not your organization is an analytics competitor, here is a checklist he provides in his HBR article:
1. You apply sophisticated information systems and rigorous analysis not only to your core capabilities but also to a range of functions as varied as marketing and human resources.
2. Your senior executive team not only recognizes the importance of analytics capabilities but also makes their development and maintenance a primary focus.
3. You treat fact-based decision making not only as a best practice but also as part of the culture that’s constantly emphasized and communicated by senior executives.
4. You hire not only people with analytical skills but a lot of people with the very best analytical skills – and consider them and value them as a key to your organization’s success.
5. You not only employ analytics in almost every function and department but also consider it so strategically important that you manage it at the enterprise level.
6. You not only are expert at number crunching but also invent proprietary metrics for use in key business processes.
7. You not only use copious data and in-house analysis but also share them with customers and suppliers.
8. You not only avidly consume data but also seize every opportunity to generate information, creating a “test and learn” culture based on what numerous small experiments reveal.
9. You not only have committed to competing on analytics but also have been building, strengthening your capabilities for several years.
10. You not only emphasize the importance of analytics internally but also make quantitative capabilities part of your company’s “story,” to be shared in the annual report and in discussion with financial analysts, customers, and the business media.