A Data Culture is Essential to Winning with DataDAMA Sydney

September 6, 2016

Jay ZaidiManaging Partner

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Copyright ©2016 by Jay ZaidiAll Rights Reserved. No part of this publication may be reproduced, or distributed without the prior written permission of the author, except in the case of very brief quotations embodied in critical reviews and certain other non-commercial permissible by copyright law.

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My Books, About AlyData, and Contact Details

Contact DetailsEmail – jayzaidi@alydata.comLinkedIn - http://www.linkedin.com/in/javedzaidiWeb – http://www.alydata.com/

About AlyData

AlyData helps organizations gain a competitive advantage and achieve their mission, using their most under utilized, yet strategic assets - Data and Information.

My books on “Data-Driven Leadership” launched worldwide on Amazon and Kindle in

July 2016.

About Me

Founded AlyData after two decades in the industry. In my last corporate role I reported directly for five years to the Chief Data Officer of the largest financial services company in the world. Worked for PriceWaterCoopers LLC, Commerce One, and DOW Chemical Company prior to that.

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AGENDAPart 1 – Age of DataPart 2 – A New Leadership Paradigm Part 3 – Change culture or Get DisruptedPart 4 - Action Items and The Climb

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A Story That Got Me Thinking• This occurred in 2009 when I was leading the data quality program at a very large financial services company. Regulator

mandated loan level disclosures not aggregated at security level. 40 data attributes disclosed.

• Very high profile project with major legal and reputational impact if it didn’t go right.

• 8 month development effort and 3 months of testing in pre-prod and 1 month prod simulation. Large budget.

• My team’s estimate to build rules to certify quality of disclosure and provide quality metrics was $x. Project leader (Vice President) only wanted to spend $0.5x. Asked his team to provide 20 high priority attributes out of 40 and we certified them.

• Extensive testing done by business and operations teams. Ran against production data for 1 month to ensure that it worked.

• Released first business day of the next month.

• CEO receives urgent call from a very large hedge fund CEO stating that disclosures didn’t look right.

• Panic ensued. All hands on deck (200 staff and 30 consultants). US $3 million spent on identifying root cause. Key finding – there was lots of missing data from certain time periods in the past and it was due to policy changes (optional vs mandatory fields). Data was fine, the company just didn’t make consumers aware of the impact of policy changes on data.

• Fields we certified had no issues. This issue could have been prevented if we were given the budget to certify all fields, not just a subset. This was a major culture issue - not taking quality seriously and appreciating it. No long term solutions were implemented – everyone went back to business as normal. This isn’t atypical and happens all the time in companies.

You have to become a change agent and lead the fight.

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Our World’s Being Turned Upside Down

And You Should Think About What This Means to You!

Massive Disruption Is Happening In Every Sector - Your Company May Be Next

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The Common Thread Across Disruptors are Data and Insights – not Technology!

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"Facebook has relationships with 2.4 billion users. The Roman Catholic Church 1.2 billion. Facebook has more relationships on the planet than God.” - Scott Gallaway, Marketing Professor, NYU

Facebook is sitting on a “Data Goldmine”. It knows our online behaviors, who we communicate with, what we like and dislike, where we’ve been, and what we’re planning to do next. Your company is sitting on a “Data

Goldmine” too – it just doesn’t know it. Imagine the power of this data and what it can do with it?

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5 Pillars of the New Business Model

1. Variety and Decentralization: Social, Mobile, Analytics, and Cloud (SMAC) drive operations

2. Better Insights: Near real time insights for decision making, risk management, and to gain competitive advantage

3. Agility: Transformation of the operating model from SDLC to Agile and introduction of automated processes

4. Transparency: Sharing economy requires a sharing culture. Change in team dynamics to become more transparent and share data and algorithms.

5. Innovation: Innovate using data, people, algorithms, and process. New areas such as artificial intelligence (AI), deep learning, intelligent conversation engines, speech recognition, and image and pattern recognition.

The Intellectual Capital of this new world is Algorithms, Data, and People.

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Some Eye Opening Facts• Data Quality: At least 6% to 10% of IT operating budget wasted due to re-work and inefficient

processing• Data Wrangling: 70% to 80% of data processing time and cost is associated with data wrangling• Dark Data: 85% of data acquired isn’t used for anything of value• Metadata (context): Inability to find data, understand data semantics, and data related rules

results in massive inefficiency• Data Security and Privacy: Access controls, tagging sensitive data, lack of oversight exposes

company to risks• Data Governance: Data accountability and governance processes lacking introduces compliance

challenges• Data Lineage: Hard to define automatically, even though its critical from audit, compliance, and

governance perspective incurs auditor wrath• Analytics and Deep Learning: Dearth of specialized tools and expertise has opportunity costs

Companies can reduce costs, improve efficiency, make better decisions, and innovate if they opportunistically invest in data management.

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Latest Australian Headlines• Aussie execs cling to gut instinct • Australia's borders to be reinforced by data science• Telstra receives $39.9 million grant to retain customer metadata• VetCompass harnesses data to research and treat ailments in cats and dogs• Census 2016: early warning on ABS data systems• It’s in the mail: how submarine secrets surfaced in Australia• Implant technology: I’ve got you, and lots of data, under my skin• Government seeks to boost its data analytics skills • Data Science Needs More Hardcore Software Engineering Skills Grads: Coles• We Will Be Bigger Than Atlassian, Says Data Republic CTO

Government and Commercial Organizations are realizing the value of Data Science and Analytics to “Win” with Data.

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6 CEO Priorities(http://blogs.workday.com/6-priorities-ceos-care-most-about/)

Putting the focus on six critical areas — growth, risk, regulatory management, technology, innovation, and people and culture — impacts a broad range of teams throughout an

organization. C-level executives, and those who report to them, need to examine the weaknesses and strengths within their

organizations, identify opportunities to make a difference, and then take the necessary steps to help their organization’s CEO execute

on these leading priorities.

The Common Thread Across the 6 critical areas are Data and Insights – not Technology!

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The New Leadership Paradigm

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The Fourth Industrial Revolution“We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. This is the Fourth Industrial Revolution or the digital revolution that has been occurring since the middle of the last century. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.” – Klaus Schwab, Executive Chairman of The World Economic Forum

I’ve labeled the Fourth Industrial Revolution the “Age of Data.”

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A New Leadership Paradigm - Leadership 2.0

Leaders and aspiring leaders must become “data savvy” and pivot on “data” not IT.

Leadership 1.0 Leadership 2.0

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Change Culture or Get Disrupted

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“Succeeding with data isn’t just a matter of putting Hadoop in your machine room, or hiring some physicists with crazy math skills. It requires you to develop a data culture that involves people throughout the organization.” -DJ Patil, Chief Data Scientist of the U.S.

Winning with data isn’t about Hadoop or new technology. It requires you to develop a data culture that involves everyone.

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“Culture eats strategy for breakfast, technology for lunch, and products for dinner, and soon thereafter everything else too.” – Business Management Guru Peter Drucker

This culture change is critical to winning with data. No amount of strategizing will work otherwise. However, most companies

are in denial that there is a culture problem.

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Let’s Define Culture First

A culture is a way of life of a group of people--the behaviors, beliefs, values, and symbols that they accept, generally without thinking about them, and that are passed along by communication and imitation from one generation to the next. Culture is symbolic communication.

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Here Are Some Characteristics of a Data Culture

• Mission Alignment: Data’s role in the company’s overall mission and goals is clearly articulated. Openly discussing strategies and innovation goals provides employees with a clear view of data’s role in the company’s overall mission and reinforces their connection to the larger organization.

• Data Savvy: Management and staff that are data-savvy – understand all the foundational elements of data management and why data is critical for success

• Behaviors: Everyone makes evidence-based decisions (not based on gut)• Right Questions: Leaders and staff are empowered to ask the right questions such as – what is the system of record for data?,

what’s been done to it?, can I trust it?, who is accountable for specific data? etc.• Information Supply Chain: Departmental silos of information are the nemesis of thriving data cultures. To promote the view of

data as a flexible asset that’s usable by multiple departments, organizations need to educate employees on how the data they use daily ripples through other parts of the organization. Employees need to see the big picture.

• Rewards and Recognition: Data successes are shared and individuals and teams responsible for them are rewarded and recognized

• Right Incentives and Alignment: Cross-functional solution teams are completely aligned on goals and incentives between IT, Data, and Business staff

• Data Sharing: There is sharing of data and information between departments and total transparency – no data hoarding. A thriving data culture depends on an environment in which everyone can share information without being perceived as negative.

• KPI Transparency: Availability and use of key data metrics and measures via comprehensive dashboard – data quality, data issue management, data governance, data security and privacy, data lineage, etc

• Robust Data Platform: A robust data platform has been built and it supports the types of analytics required to make decisions, manage risk, and innovate

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6 Key Ingredients For Building a Data-Driven Company

1. Foster a startup culture (progressive culture drives success)2. Ensure that business, data, and information

technology organizations are completely aligned (organization alignment) and pick the right problems/opportunities to tackle

3. Always focus on customers' needs (end user)4. Constantly innovate (new products and services)5. Pay attention to changing market conditions and adjust to them (market

intelligence)6. Build a robust data platform (right insights at the right time)

This is the winning formula used by a multi-billion dollar data-driven company.

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Companies Require Small and Big Data To Succeed

Traditional (Small Data) Data-driven (Big Data)Highly structured data Structured, Unstructured, Semi-structured

Pre-defined data schemas Flexible data schemasPre-defined data models (schema on write) Undefined data models (schema on read)Relational database management systems Hadoop and NoSQL data stores

Silos of data Big Data Lakes (consolidated data sets)Performance and scalability limitations Infinite scaling

Mostly on premise data Highly decentralized data (Cloud)Data Mining and Business Intelligence Predictive, Prescriptive Analytics, Deep Learning

and Artificial Intelligence

The introduction of Big Data into the “Data driven” business model requires a culture change - new data and project management skills,

new execution capabilities, and agility at its core.

“My biggest fear is not crashing on a bike…

It’s sitting in a chair at 90 and saying,

‘I wish I had done more’.”Graeme Obree

The Culture Change Framework

Organizational Culture Change

Business Case For Change

Creating theclimate for

change

Implementing and

SustainingChange

Engaging andenabling

the organization

1. Establishing a sense of urgency2. Creating the guiding coalition3. Development of a change vision

1. Communicating the vision for buy-in2. Empowering broad-based action3. Generating short term wins

1. Never letting up2. Incorporating

changes into the culture

1. Establishing the need for change2. Tying culture change initiative to business priorities3. Articulating the vision and tangible results

Team-Building ProcessesTeam building is a development process where the course is divided

into 4 phases plus a resolution phase.

Perf

orm

ance

Course of time

Low

High

Orientation phase (forming)1

Growth phase(performing)4

Cooperation phase(norming)3Confrontation phase

(storming)2

Resolution phase (adjourning)5

Every great dream begins with a dreamer. Always remember you have within you the strength, the patience and the passionto reach for the stars to change the world

Harriet Tubman, Abolitionist, Humanitarian & Spy (1822 – 1913)

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Actions

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Here’s What’s Required To Win• Company leadership needs to develop a strategy for data to align with business priorities and competitive

landscape• Assess company culture to identify strengths and weaknesses, based on prior projects/programs• Benchmark your company vs Data-Driven companies with respect to people, process, technology, and data to identify gaps• Assess maturity of your data management capabilities to identify areas of improvement

• Develop a roadmap for change• Galvanize leaders to become “data-driven” and to invest in data management• Incrementally build capabilities in an opportunistic manner (with focus on business results) • Influence your peers to build a coalition for change

• Invest in training• Train leaders and associates in change management• Train leaders and associates on new frameworks, technologies, execution strategies to become data-savvy• Educate and raise awareness about new data management capabilities amongst peers and leaders

• Build World Class Execution • Pick specific areas within your department where you can show tangible direct improvement to the bottom line by

applying the new execution model

Winning with data requires culture change, investments, and a long term view.

The Climb– It’s Tough But Helps You Win

1. We are living in the “Age of Data.” Companies that aren’t data-driven will get disrupted sooner or later

2. A new leadership paradigm has emerged and it is called “The Golden Square” – people, process, technology, and data

3. A data culture is required for winning with data and it requires people throughout the company

4. Implementing and sustaining culture change is hard but can be accomplished with the right C-level sponsorship, change strategy, framework, roadmap, and execution

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Appendix

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A Few Articles I’ve Authored(All articles available at https://www.linkedin.com/today/post/author/posts#published?trk=mp-reader-h)

1. Data Governance Demystified – Lessons From The Trenches

2. Bridging the Data Governance Chasm

3. You Think You Know Data? Think Again

4. 6 Reasons Why Big Data Investments Aren’t Paying Off For Some Organizations

5. 5 Reasons More Companies Don’t Have Data Quality Programs

6. What’s An Information Supply Chain and Why You Should Care? 7. The Dark Side of Big Data

8. Re-Thinking Information Security and Data Governance

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6 CEO Priorities1. Finding Growth: CEOs of more successful companies are highly focused on growth, including launching new products or services,

finding new business models, cultivating deeper customer relationships, pursuing innovation as a long-term strategy, expanding geographically, and creating deeper ecosystems. As an example, according to KPMG, two-thirds of CEOs said they expect international operations to bring in more revenue over the next three years. In many cases, the risk of standing still may be greater than the risk associated with change.

2. Taking on Risk: CEOs see danger in just maintaining the status quo. To achieve growth, CEOs believe they need to be more aggressive about taking on risk. In fact, according to KPMG, one in three CEOs think they are not taking on enough risk as it relates to their growth strategies. Competitive threats from both new market entrants and established competitors are compelling CEOs to have more appetite for risk, including finding ways to move more quickly into new product and services areas and regions.

3. Managing Regulatory Changes: Managing regulatory changes—including corporate tax rates, environmental regulations, and financial reporting—is a major concern for CEOs, which makes it a big priority. In the KPMG study, regulatory concerns ranked as the second-most important topic for CEOs, only after global economic growth.

4. Leveraging Technology: More than two-thirds of CEOs surveyed by PwC view data and analytics as technologies they need to adopt more broadly—and that will drive the most benefits. Still, CEOs haven’t fully mastered how to best make use of data to drive business outcomes, and report they’re looking to their teams to leverage information to make better decisions.

5. Pursuing Innovation: CEOs report that transformational innovation within their own companies must be a high priority, especially in an environment where new market entrants can quickly rise up and challenge existing business models. Increasingly, transformations need to happen simultaneously across multiple parts of the business, requiring organizational agility, a willingness to change, and embracing innovation as a core competency. CEOs view innovation as a long-term strategy, not a short-term way to “fix” parts of the business.

6. People and Culture: To get the right people attracted to their organizations, CEOs realize culture must also be a priority. According to the KPMG study, “Having a purpose that employees can align to, providing the skills and opportunities to learn and grow, and building an inclusive culture are all critical to attracting and retaining the best talent, which in turn helps drive innovation initiatives that drive the business forward.” Culture can also impact the bottom line. Suppliers and customers are looking at how companies behave in the wider social context, and will make business decisions based on a broader set of criteria than traditional metrics of functionality or cost, reports KPMG.

Stakeholder-AnalysisStakeholder with additional symbols to display their attitude (positive / negative) to the project.

Internal Stakeholder External Stakeholder

Owner

Employees

Management

Customer/ Interested Parties

Suppliers Population (e.g. residents)

CompetitorsPartners

Other stakeholder groups: media, government, bank, funders, creditors …

Goal Criteria − SMARTThe 5 criteria that define a goal so that it can be used in

project management

Specific

Objectives have to be specific and positively

described.

Measurable

A goal achievement

should be measurable.

Attainable

It should be attractive for the project team to reach the goal.

Realistic

The objective needs to be

achievable in a realistic way.

Time-bound

The goal has to set within a time frame.

S M A R T

Risk CategoriesAssessment Scheme for the Qualitative Risk Assessment

high> 75

low<25

medium25-75

high

medium

low

Risk 4

< Responsible >

Risk 3

< Responsible >

Risk 5

< Responsible >

Risk 2

< Responsible >

Risk 1

< Responsible >

Occurrence Probability (%)

Impact on the Project (Deadlines, Costs, Quality)

Risk 1:Description of Risk and Cause, if necessary, probability, impact and countermeasure.

Risk 2: Description of Risk and Cause …

Risk 3: Description of Risk and Cause …

Risk 4: Description of Risk and Cause …

Risk 5: Description of Risk and Cause …

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Some AlyData Partnerships

Data wrangling for small and big data.

Smart Data Catalog - find, understand and govern data in Hadoop data lakes.

Data catalog for Hadoop and relational data stores.

Data Governance process automation.

Converged Data Platform.