Activation and action are key.

By Roger Ehrenberg
Roger Ehrenberg is the founder and Managing Partner of IA Ventures.

Throughout my business career, I’ve observed that people love to label current fashions. “Web 2.0,” “Cloud” and “Social” are three which are currently in vogue. In my lifetime likely none was bigger than “.com,” describing a business and its recognition of the importance of the Internet. Remember when long-established businesses would change their names by adding a .com extension, only to receive a salutary stock market reaction? This was an equity market story that was destined to have an unhappy ending, from which the public markets still have yet to fully recover. Needless to say, the Internet has changed billions of lives in positive ways too numerous to mention, but those benefits didn’t come from labels, stickers or launch parties. They emerged from businesses new and old building and re-positioning their strategies to harness the Web’s true power, and to engage with customers in more and better ways than was previously possible. Nobody gratuitously adds .com to their names any more, and as far as I know I haven’t heard anyone refer to an Internet-based business as a .com for at least five years. That said, I’m beginning to detect a similar phenomenon in companies touting a characteristic particularly close to my heart: the use of “data” to describe a value inherent in the business. And in many if not most cases, it’s not true and I’m not buying.

It doesn’t take a genius to know that data is everywhere, and that it is growing exponentially across virtually every dimension: bigger, faster, deeper – and perhaps even more messy. Every business uses and generates data, but this doesn’t begin to capture what it means to be a data-driven enterprise or where data is viewed as a discrete asset and treated as such. It is a fundamental issue of strategy and culture, and the mere presence of data is not itself an indicator of having deep and relevant data DNA. “Hey, our business generates a lot of data, BIG DATA” is a phrase I hear frequently which I assume is supposed to get me excited. It doesn’t. “Hey, we’ve got this thesis that as our business scales we’re going to build a monster data asset that can better help us attract, retain and monetize happy customers. It will help us create competitive barriers and we’re planning for this from Day 1. We’ve shared some early data with a data-hacker buddy and feel this is a promising avenue for building company value.” Hey now, NOW you’ve got my attention.

There is a world of difference between the mere presence of data (say, an inert corpus of data accumulated from customer transactions) and its activation (putting that same data in a form that can be analyzed in real-time to provide intelligence about trends, pricing, feature attributes, etc. and classified and stored in a way that subjects itself well for future analysis). The data-driven enterprise will embody the notion of creating and leveraging its data asset in everything it does, and will use it to drive current and future decision-making, not merely retrospective analysis. There isn’t some checklist to determine if a business has a deep data culture or not; believe me, if you are one you know it. And if you toss around labels that sound good but ring hollow as there isn’t a bridge between headline and application, then, well, you probably lack the culture I’m describing.

There isn’t anything wrong with not being a data-driven enterprise. I mean, we all can’t be data-driven, can we? Well… I take that back. There is something wrong if a business isn’t data-driven in some way. Online or offline, it doesn’t matter. Commerce generates data. Businesses need to learn from and leverage data to remain competitive and grow. Whether you operate a barber shop, an enterprise software business or sell virtual goods online you have the potential for creating a valuable data asset. But I’m here to ask you a simple question: “Where’s the beef?” Because without it don’t talk about it: just get it. It’s never too late to adapt but it requires core cultural change, and half-hearted efforts simply won’t work. Just as building an online culture has been critical for all businesses to compete in the 2000s, building a data culture has become an essential element for success in the 2010s and beyond.

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What exactly is inertia? Simply put inertia is everything that makes up what your organization stands for at the moment you embark on an accelerated path forward. Inertia can include any or all of the following:

• Fear of change
• Fear of the unknown
• Your organization’s culture
• Your organization’s processes
• Prior experience
• Comfort in how things were done before
• Your brand’s reputation in the marketplace
• The perception of the company within the company

I’m sure you’ve experienced what it’s like when a change program suddenly slows or stalls. For many it feels as if something grabs hold of the forward progress and pulls it backward. Some say it’s similar to running headfirst into a strong wind.

Think about it. Inertia is all about how it was. Yet, there you are trying to move away from how it was to how it needs to be. You’re committed to transcend beyond something with a lot of history and mass, and determined to morph it into something that’s relatively unknown. No wonder inertia disrupts forward progress. The laws of nature are fiercely at work.

What to do?

First, never forgot how powerful inertia can be. Recognize upfront that it will rear itself – right out of the gate and whenever cracks appear in your change program due to uncertainty, soft results, or a weak effort.

Second, be prepared. Anticipate the power of inertia by arming your change coalition as forcefully and deeply as possible. Give it the chance to succeed. Let everyone know that resistance will happen so they don’t panic. Evangelize how the future can be better than how it is. Continuously demonstrate how the competitiveness – even the vitality – of the enterprise is at stake. If you do all of this, the natural blocking force of inertia will ease enough to give you the time you need to move forward.