52% of Fortune 500 companies have disappeared since 2000. Jeff Bezos provides four guiding principles that organizations can follow to avoid a painful death. Data and insights derived from data are critical components of staying in Day 1 and chief data officers help organizations do that.
What is Day 1?
In a letter to shareholders, Amazon's CEO Jeff Bezos discusses the Day 1 concept. He states: "That’s a question I just got at our most recent all-hands meeting. I’ve been reminding people that it’s Day 1 for a couple of decades. I work in an Amazon building named Day 1, and when I moved buildings, I took the name with me. I spend time thinking about this topic.
Staying in Day 1 requires you to experiment patiently, accept failures, plant seeds, protect saplings, and double down when you see customer delight. A customer-obsessed culture best creates the conditions where all of that can happen."
Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1. - Jeff Bezos
Four Guiding Principles to Avoid Day 2 (or death)
Bezos shares the following four guiding principles that he espouses to Amazon staff, to avoid Day 2. I will connect each guiding principle with the underlying data management and analytics foundational capabilities required to accomplish them:
1. True customer obsession: Obsessive customer focus is by far the most protective of Day 1 vitality. In order to obsess over your customers; offer personalized products or services, you must understand each of them on a personal level (e.g., demographics, family relationships, profession, social profile, etc.) and as a customer (e.g., browsing history, transaction history, repeat business, referrals, likes, shares, etc.). This is accomplished by creating a 360-degree view. These "golden records" or "master data records" enable customer intimacy. Please note that a customer can be an individual or an company (depending on your business - Business to Customer or Business to Business).
To learn more about this, click here (What is MDM?), here (5 tips to implement MDM) and here (All you need to know about evaluating MDM products) for more information on this topic.
2. Resisting proxies: As companies get larger and more complex, there’s a tendency to manage to proxies. This comes in many shapes and sizes, and it’s dangerous, subtle, and very Day 2. A common example is process as proxy. Implementing repeatable processes for commonly used functions is an industry best practice. The goal shouldn't be to blindly follow them, but to continuously improve them to get better and faster results. This applies to data quality, data governance, and issue management processes, and friction introduced during data processing.
To learn more about this, click here (Data Quality is Job 1 and Here's Why), here (Bridging the Data Governance Chasm), and here (Bad Data is Costing US at Least 6% of GDP).
3. Embrace external trends: The outside world can push you into Day 2 if you won’t or can’t embrace powerful trends quickly. If you fight them, you’re probably fighting the future. Embrace them and you have a tailwind. We’re in the middle of an obvious one right now: machine learning and artificial intelligence. Companies are faced with a data avalanche and therefore data processing and analytic methods that worked don't work any more. Therefore, it is important for organizations to embrace external trends such as machine learning, artificial intelligence, and Blockchain to gain competitive advantage and avoid getting disrupted. This is the reason why the field of data science has gained tremendous traction lately.
To learn more, click here (11 characteristics of a mature data culture), here (Data value pyramid), and here (Managing data is hard, but it's the best investment).
4. High-velocity decision making: Day 2 companies make high-quality decisions, but they make high-quality decisions slowly. To keep the energy and dynamism of Day 1, you have to somehow make high-quality, high-velocity decisions. Most decisions are made based on data and facts, insights gleaned from data, experience, and domain knowledge. Decision makers benefit tremendously by having data, facts, and insights at their fingertips. I've coined the term "friction less data processing" to describe this.
To learn more, click here (Use analytics, data, and facts for greatest impact), here (Use Data Visualizations To Tell Stories and Gain Influence), and here (Friction less data management framework).
Conclusion
Jeff Bezos concluded his letter to shareholders with the following:
"So, have you settled only for decision quality, or are you mindful of decision velocity too? Are the world’s trends tailwinds for you? Are you falling prey to proxies, or do they serve you? And most important of all, are you delighting customers? We can have the scope and capabilities of a large company and the spirit and heart of a small one. But we have to choose it."
Master data, data quality, governance, machine learning, artificial intelligence, Blockchain, and insights derived from data are essential for an organization's success and as data leaders, CDOs play a critical role in enabling their organization to stay in Day 1 and avoid a painful death!
Is your organization equipped to deal with the data tsunami and win or is it going to get disrupted? Take steps now to strengthen the data foundation and analytics functions.
Go forth and conquer!
The only way to win with data is to become data-driven and data savvy. My books will guide you through this process. Order Data-Driven Leadership: A New Leadership Paradigm in the Digital Age and Data Driven Leaders Always Win: The Essential Guide For Leaders in the Age of Data and share their timely, universal, and powerful message with your personal and professional network.
About Jay Zaidi
As the Founder and Managing Partner of AlyData, my firm and I help leaders derive tangible business value from their data and information assets — to power sales, marketing, innovation, product development, and risk management. Our clients include financial services, healthcare, biotech firms and federal agencies. I’ve led strategic data and analytics engagements at Fannie Mae, Citibank, Hilton Hotels, The DOW Chemical Company, Ohio Edison, Illinois Health and Science, IBA Molecular, and The Consumer Finance Protection Bureau. To learn more or get in touch, visit http://www.alydata.com.
Or follow me on Twitter: @jayzaidi