July 14, 2015 | Written by: Reena Jana
Categorized: Data | Innovation | New Thinking
When companies first began to add the role of chief data officers to their c-suites not too long ago, many newly minted CDOs believed their focus would be on data management and risk. While that is still very much the case, pace-setting CDOs are looking at data as a source for inspiration for new products and services. When they do so, they offer their companies and their customers increased business value. Research shows that companies that excel at analytics are also 3.7 times more
likely to excel at developing new revenue streams than those who do not have strong analytics proficiencies.1
With the rise of the internet of things–networks of connected equipment, objects and sensors–companies will have the opportunity to aggregate and interpret increasing volumes of information. Research firms estimate that in the next five years, 30 million devices will be online, from engines to home alarms.2 This means that CDOs seeking a competitive advantage would be wise to consider how to tap into the ever growing data resources that the internet of things promises to harvest, and more important, how this data can fuel fresh types of products and services.
Think (and act) like a designer
The key to winning the data innovation game will be to find patterns in unusual, even counter-intuitive places. For instance, Todd Cullen, CDO of Ogilvy, began seeing unusual patterns in a client’s shipping container delivery log. This led his team to recommend new strategies for that client’s product launch timing. Cullen also saw an opportunity for turning this type of creative analysis into a new strategy offering for his agency, thus making a new market.
A. Charles Thomas, the CDO of Wells Fargo, advises to look for scenarios that seem unlikely, such as a rash of 20-somethings suddenly paying down debts and setting up savings accounts, to identify waves of buying behavior that might be ripe for a fresh product for an unforeseen segment. In this case, the new segment might be young home buyers who are shaping up their credit to apply for their first home loan. He suggests that CDOs think (and act) like designers and prototype data innovations with small teams to show how an exciting new idea might work.
Don’t lose sight of creativity
Data can also influence the actual design of innovative improvements on existing products. Peter Vesterbacka, Mighty Eagle (his title; he’s the equivalent of a data-driven CMO) of Rovio, maker of the “Angry Birds” video game franchise, pays attention to fan data to innovate not only the in-game experience, but also the app-store purchase experience to lead to increased sales.
He cautions, however, that when pursuing data-driven innovation, it is crucial to stay open minded. As Cullen and Thomas are also quick to emphasize, it’s only when your priority is on creativity, versus playing solely to the data, that truly new markets can be made.
1IBM Center for Applied Insights, “Inside the Mind of Generation D”
2ABI Research, “Internet of Everything”
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