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The Pillars of Strategy: Data and Strategic Decision Making

October 4, 2018
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This is the second in a series of articles describing the latest trends and key questions that often arise during the planning sessions we conduct with community financial institution boards and executive teams.

Perhaps the newest concept to emerge forcefully over the past planning cycle is “Data as a Strategy”. 

Clients tell us routinely that they are awash in information inside their shops.  Yet, while many know that they should be using it better to make strategic – not tactical or functional – decisions, they really don’t do it well.  They mostly rely still on intuition or anecdotal experience when making key strategy choices. One’s “gut” is not good enough when consumer expectations about relevance and helpfulness are being driven by data and analytics behind the scene.

To get you started, here are some thought-provoking best practices:

  1. Deliberate and settle the differences on what constitutes “correct data.”  Clients who are showing success here have begun to understand the differences between “systems of record equating to sources of one truth” and “pictures of truth designed for strategic decision making.”

    The first approach is typical and often irreconcilably debilitating as institutions never decide which “system of record” is right.   The “pictures” approach helps overcome this hurdle by framing the discussion differently and away from the “quest for perfection” toward “client centric” experiences that support your business cases.   We strongly encourage this exercise be done before you even attempt to rearrange data.
     
  2. On the data itself, the obvious value of your payments data cannot be understated.  However, many clients are beginning to think about their customer bases as a network of households: customers who are connected to one another via social ties, employment, or family relationships.

    Those connections have significant implications for your brand.  Chief among those implications is the quest to discover “influences and influencers” within the network.  Some customers’ opinions carry more weight either from their status in their social network or from the breadth of that network.   Identifying your influencers can perhaps help support your branding and propagate more effective “Word of Mouth” marketing: both traditional (i.e. people actually talking to one another) and virtual through social media.
     
  3. Many clients have “analyst” positions, who typically work with functional data, spread throughout their organization: a marketing analyst, a financial analyst, a credit analyst, and so on.  Consider establishing an “Analyst Council” with standing meetings where these players get together (without management) and discuss how they are using their data.  Together, in a collaborative setting, they can cross-pollinate ideas and remove potential roadblocks.
     
  4. Start deciding who will own these strategic data functions.  Some institutions are establishing a Chief Data Officer role and the Central Data Office function to speed along points 1, 2 and 3.  We see many clients establishing these groups under the purview of the CFO or CIO.  Others are very intriguingly thinking that the CDO is part of the “c suite” directly.  That is a lively part of the discussion.

As you can see, “getting data strategy right” doesn’t mean “perfect” – a perfect data strategy is impossible to attain, in large part because the possibilities, tools, and opportunities keep evolving. Instead consider that “getting data strategy right” really means achieving “agreement”.  Start building different expectations around how your financial institution uses data.  Start small and try to solve tightly-defined business cases. Once you’ve built that agreement and put it into practice, you’ll find broader strategic choices becoming clearer.