How and Why Data Literacy Matters in Complex Strategic Change

Successfully driving organizational change – mergers and acquisitions, restructuring, material infrastructure/technology implementations – inevitably comes down to a small group of people making time-banded decisions based on the data currently available to them.

That data is often made up of whatever was available in the due diligence room, such as financials, HR statistics, and customer contracts, and is read by designated senior representatives from key parts of the organization such as Finance, HR, and Operations managers.

The data literacy involved in understanding and analyzing that data, considering the methods of collection and management, and evaluating how it is reported and presented can have a massive impact on the outcome. Success in programs of major change comes down to data literacy.

Let us start with a few examples of how data literacy matters in complex strategic change.

• I once worked on an acquisition where the terms of the Purchase Agreement indicated payment for the acquired revenue was based on the retained revenue one year after conversion.  It did not say if the payment was stand-alone for each payment or cumulative. That problem in data definition, one of the core competencies of data literacy, left us with a US$10 million difference between stand-alone or cumulative.

• For a major restructuring from regional operations centers to a global follow-the-sun model, one of our key metrics was regrettable turnover. Unfortunately, the source system for regrettable turnover did not have effective quality controls, leaving the business unclear as to the true volume of human capital losses we wanted to avoid.

In both of these situations a lack of data literacy – the ability to understand and analyze, consider collection and management, and evaluate the reporting of data – all of which fails to articulate the problem clearly in data terms – hampered progress toward a solution.

Driving change

When that small group of people responsible for change who need to make the time-banded decisions lock themselves into a room, the successful ones focus on a few core activities and create the structure to keep the project on the critical path.

Core activities require agreement on what you should measure – what matters and what data do you need to evidence success – and the critical path requires an agreed methodology for tracking progress, and data literacy is key.

Core activities

The starting point of change varies widely. However, whether the defining moment of your change is a new regulation, new technology, integration with another firm, or simply a new direction from leadership, the core activities in organizational change rarely vary:

Data and data literacy feature at every point on this pathway. What happens if you restate the activity through a data literacy lens, thinking about understanding and analyzing, considering collection and management, and evaluating the reporting of data?

The most fundamental aspect of any change is the agreement on what you are measuring to define success, and it requires a meeting of the minds on what terms actually mean – a component of data literacy – and what is important to this particular change.

Critical path

Simply put, the critical path is the set of activities that must happen in sequence to make the change a success – an agreed methodology for tracking progress.

The data required to understand where you are on the critical path, and the data to help you ensure something material is not missed and also that something non-material is not over-weighted, must be included in your progress tracking.

Project managers and leaders in your project governance can track progress, but only if the right data is considered. Again, data literacy is key to establishing valuable tracking and reporting.

A WORD ON ‘GUT INSTINCT’

So what do we do about the “gut instinct” leaders? This is the group of experienced business leaders who have ‘been around the block’ and been successfully driving strategic change in their careers without anyone ever considering them to be data literate.

They don’t talk the talk about data lineage and mastering, or trusted sources of distribution, or anything else that smells like data governance.

Should we worry about teaching this group data literacy?

It is funny, while the ‘gut-instinct’ pack does not always sound data literate, they very often can tell you exactly how their operations are providing clean data and how it is done.

If you ask about the right source of a particular bit of data, how and when the data travels through the organization, and when and how the quality checks take place, they will give you chapter and verse.

Or for fun, ask them what they think of the financials. And what are financials if not data? I would argue that the gut-instinct leaders are very data-literate, just in the closet.

So how do we bridge the gap? Both sides can take a step forward – the ‘data-first’ folks can tone down the data-speak and put their points into real-world terms and the ‘gut-instinct’ crowd can be more open to sharing their deep knowledge about how things work.

If both sides behave more openly, the whole opportunity set might be lifted. Silly to have to say it, but the enemy is the competition, not the guy in the office next to you.

Conclusion

Successfully driving organizational change inevitably comes down to data literacy – understanding and analyzing data, considering the methods of collection and management, and evaluating how it is reported and presented.

Doing this effectively across the life of a change program can have a massive positive impact on the outcome.

Whether you are in finance, human resources, or operations management, understanding both the veracity of the data you use as well as the data itself, is key to success.

In programs of complex change as time is compressed and pressure to perform intensifies, the ability to understand data (data literacy) becomes more and more important. Success in programs of major change comes down to data literacy.

About the Author:

Deb Lorenzen is the CEO of Lorenzen Advisors, a firm focused on research and strategy around driving change in the global capital markets. Lorenzen has over 30 years of experience across multiple jurisdictions in major financial firms, including as Chief Operating Officer of various portfolios for industry leaders, State Street, and BNY Mellon.

Her most recent corporate experience was as Head of Enterprise Data Governance and Master Data Management at State Street. Prior to this role, she led the Strategy and Data Governance team at State Street Global Advisors, the investment management arm of State Street.

Lorenzen also serves as Chair of the Board of Directors for Stearns Bank N.A. She also chairs the Audit Committee for the firm. She holds an MBA from Columbia University, and Bachelor’s Degrees in Economics and Journalism from Fresno State. She is an Advisory Board Member for the Global Female Leaders Summit in Berlin.