The Risks and Rewards of Data

Who distrusts data? Lots of people, apparently. Or that’s what you could conclude if you’ve been paying even the scantest of attention to the regulatory threats tech companies like Facebook and Google have been facing lately. Data seems to have become a four-letter word and its collection is an easy thing to point a judgmental finger at, given the growing chorus of individuals and governmental agencies the world over that are clamoring for a crackdown on the perceived rampant abuse and/or misuse of it.

Let me be clear. I’m on the side of those arguing for more control but there’s more to this than that.

We need to understand and accept that the world is not going to stop creating data. We’re well past that even being a realistic question. In fact, there’s so much being created now that the total exceeds the count for all the grains of sand on Earth. The Brookings Institute discussed that very point and many others in this piece. Data is ubiquitous and the reason it never stops being collected is because it is a valuable recording of so much of what we do as a world and what we say. There have been tremendous, and documented, unforeseen downsides to this, of course, but also tremendous individual and societal upsides too. So the question should really be about who should have access to what data and the balancing of associated risk and that’s what I want to talk about.

It’s Not Really Data We Should be Worried About Anyway—It’s Information

Data is just bits and bytes. It is not the same thing as information. Information is something you can use on its own; data you cannot. For instance, my social insurance ID (I’m in Canada) is just one piece of data. My driver’s license number is another. I can use either for those occasions when I need to validate who I am but on their own they’re mostly benign. However, if someone were to correlate both with some piece of my digital footprint and with malicious intent it could become damaging to me. But just because there is risk, should that mean we don’t, as a society, attempt to do great things? Of course not. After all, how would the US have ever landed on the moon way back in 1969 if it hadn’t taken risks? So, for me, it’s all about how we strive to achieve balance between the benefits we might receive and risk in how we address challenges. There’s always an element of risk in every step we take forward as societies, as groups, and as individuals. I feel that closing things off and making information more difficult to attain are not wise paths to take because they will restrain the more noble urges of our nature in order to defend against perceived malice. There are smarter ways to deal with the challenge.

For Businesses, Risk Is About Capital—Are They Willing to Make a Calculated Bet on Winning?

Companies operate on an information currency. Without access to a wide array of information sources their ability to effectively compete and to satisfy customers will be severely compromised. Many companies understand that information access within their own walls and without, in fact, actually needs to expand and to do that will require a much greater expansion of their digital capabilities. Many of us argue that it is worth it today, and obvious that they should, that established companies risk capital and short-term growth by investing in digitally transforming their processes because the eventual gains will outweigh the short-term risk of loss. The ability to streamline their processes and to digitally connect more closely with customers offers too much potential revenue and goodwill upside to ignore. Here’s a recent report from McKinsey and another one from the Association of International Certified Professional Accountants and Oracle that offer ample proof of significant and measurable progress made by companies willing to tackle the generational challenge of upending their business model in the name of digital transformation. By the way, “Upending their business model” is not hyperbole because digital transformation does indeed mean upending how you go to market. So, yes, there is risk but I believe the eventual rewards are well worth it.

Does It Have to be Disruptive?

Yes, and let’s be clear—disruption isn’t just a strategy for startups. Large enterprises, too, need to be disruptive and not just within their own markets and adjacent ones. They need to be disruptive against their most fierce competitor of all, themselves. But to be that disruptive means confronting significant cultural obstacles. Vested interests that unwittingly perpetuate the way processes have always worked, executives who fail to keep pace with market forces and to make the necessary strategic adjustments, careers built around building conventional capabilities and teams, track records of growing market share without consideration for the customers’ product adoption—these are all inhibitors to change. And they are increasingly seen too as potential relics because it’s difficult to justify how the value they represent correlates with improving the customer experience or with increasing the propensity for customers to choose to renew or grow their subscriptions. That’s what it’s all about now, understanding the customer through the data you collect about them to the extent that you can plan for how to encourage them to stay and grow. So that’s the risk. Can you justify how your work with data, and therefore how it informs and drives your actions, affects those outcomes?  

There Is More Upside in Knowing Information than in Remaining Ignorant

In Renaissance Europe, from 1300 to 1600, communication expanded to the masses due to the introduction of moveable type printing. Its inventor, Johannes Gutenberg, managed to unleash forces that are still felt to this day. The democratization of the means for communication challenged and deposed political and religious authorities across Europe, increased literacy of the populace, and eventually gave birth to the middle class. The world’s never been the same. In today’s world, digital transformation might do the same by giving us the means for communicating with far more precision, quality, and relevance, and might very well be more important, impactful, and meaningful to the recipient.

                                                                                                                                         

Data plays an integral in modern marketing, especially when it comes to targeting and segmenting potential customers. It allows for effective lead scoring, so you know which leads to pursue and which need more nurturing. What is the proper way to go about this? Find out more about best practices and how to drive better results with “Lead Scoring for Modern Marketers.”

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