Going over some new research on the impact analytics has had on their clients, EY’s Chris McShea, Dan Oakley, and Chris Mazzei write at the Harvard Business Review that “efforts to adopt analytics upset the balance of power in the C-suite, and this shift often had a negative impact on analytics initiatives”:
Shaped by history, personalities, and events, levels of influence the members of the C-suite were not all equal. But in order to function effectively, the rivalries and politics had evolved to a tacit equilibrium. While skirmishes occurred constantly on recurring allocation matters (i.e., budgets and plans), the balance of power proved to be quite resilient. This benefited these organizations in many ways, including providing a stable direction for employees.
But the commitment to advanced analytics disrupted this equilibrium. Since there was no natural owner of analytics within the traditional organizational structure, multiple executives competed hard to own the new capability. While not every C-suite member wanted to manage such a high-stakes opportunity, the most powerful members were eager to oversee an influential new pool of talent and command more time on the board’s agenda. With the exception of the “winner,” a feeling of vulnerability settled over the other executive team members when the analysis conducted by the analytics group revealed inefficiencies and missed opportunities in their respective functions.
This is another example of why organizations need enterprise leaders.
It’s increasingly apparent that “analytics” cannot and should not just be owned by one business leader or function. In HR, talent analytics leaders rely on other functions for data (because merging data from across functions provides more valuable insights than any single function can on its own) as well as for knowledge sharing and best practices (for instance, Finance and Marketing started their analytics journeys years ago, so HR doesn’t have to reinvent the wheel when setting up a function). Hence the push for enterprise-wide analytics projects that entail some kind of centralization of all of the data an organization has.
And yes, that centralization can create ambiguity about who “owns” the project and cause individual leaders to experience a loss of power or control, but these days, that’s hardly unique to analytics. Due to constant change, the increasing importance of networks, and other recent transformations in how businesses operate, many leaders feel like they no longer have as much control as they used to, which they think they need to do their jobs well. This is a mindset that needs to shift in order for organizations (and their analytics initiatives) to succeed.
So to leaders, we say: Why waste your time on interdepartmental politics when you could be working together to make your business run better? You probably have expertise to lend to an analytics initiative, so contribute. Share the responsibility and the success. Of course, this is easier said than done, but analytics—a defined initiative with plenty of opportunity for collaboration—may actually be the perfect place to start practicing enterprise leadership.
(CEB Corporate Leadership Council members can read more about enterprise leaders and how to develop them.)