In a recent KPMG report, CEOs indicated that data and analytics would be one of their top three investment priorities over the next three years. An Economist Intelligence Unit study showed 70% of US senior executives felt analytics would be either “very” or “extremely important” to their business’s competitive advantage. However, much of this expected value is yet to be realized—only 2% of respondents felt their analytics investments had already had a “broad, positive impact.” While CEOs place larger and larger bets on analytics and business intelligence (BI) tools, they may not realize how much of their data-driven success actually rests on the shoulders of a strong executive sponsor.
Introducing and embracing a new data-driven paradigm often requires difficult changes to mindsets, skills and behaviors. It can impact how your people form decisions, what expertise you look for in new hires, what information your teams share with each other, and even how your overall organization operates. Strong executive sponsorship is almost always needed to overcome the organizational inertia that may resist and derail a transformation effort to become more data-driven.
The change management consultancy Prosci reported that “active and visible” executive sponsorship has ranked consistently as the top contributing factor to project success since it started capturing benchmarking data in 1998. In 2016, they found only 29% of projects met or exceeded objectives when led by very ineffective sponsors compared to 72% for projects which were led by extremely effective sponsors. A 43 percentage point difference is significant when it could make or break the return you receive from your analytics investments.
Today, most analytics and BI initiatives will have executive sponsors assigned to them. Unfortunately, not all of these initiatives will be equally successful, and in many cases a reluctant or indifferent executive sponsor can spell disaster. In fact, it can actually be worse to have an ineffective executive sponsor than no executive sponsor at all. Top management assumes a data initiative is covered when it has an executive sponsor assigned—regardless of how effective that leader really is. And when an analytics initiative lacks sufficient attention and support to be successful, its eventual failure will be blamed on any number of scapegoats—the vendor, an implementation partner, or the internal analytics team—but rarely on the ineffectual sponsor. The real reasons why the initiative failed are covered up, delaying the value a company could realize from its data-related efforts.
**This article was originally published on Forbes.com on August 24, 2016