Why everybody hates data (and change)

To kick off series five, Alex Vail - Chief Executive at the Data Strategy Alliance, talks to Daisy about starting a new non-profit trade association to help businesses with digital transformation. Expect some sobering statistics on how (un)prepared many businesses are for big data as well as plenty of tips about how to manage major change programs.

Key takeaways include: 

• Data remains a massive challenge. It's a big technical challenge. It's a big hiring challenge. It's a big change challenge. It's a big comms challenge for your board, internal stakeholders, and probably your consumers.
• One way to deal with that is to get more comfortable with failure and plan how you will deal with it when it (inevitably) rears its head.
• The power of great trade associations to convene business and help them put aside competitive urges for the greater good.
• The importance, once again, of internal advocates and allies.

Find all of our episodes - and full transcripts for each one - at https://www.buzzsprout.com/1121639

Transcript

Daisy Powell-Chandler 

Welcome to Why Everybody Hates You, an audio support group for reputation professionals. If you have any responsibility for how people talk, think and feel about your organization then you are in the right place. I'm your host, reputation coach Daisy Powell-Chandler back for series five. How did that happen? 

For this episode, I spoke to Alex Vail, Chief Executive at the Data Strategy Alliance, which is a new nonprofit trade association to help businesses with digital transformation.

Daisy Powell-Chandler  0:20  

It's a delight to have you on the show. Thank you for joining us. Let's start with the obvious question. Why does everybody hate data?

Alex Vail  0:31  

People don't like what they don't understand Daisy. And the fact is, for most people data is something that we consider to be personal to ourselves. And when you're in a work environment, I think most people who work in offices understand data to be something that's in a CRM system or a spreadsheet. And that's without looking at the different sectors. If you start looking at different industries, you'll find that for some people data is how you identify the carbon emissions in your downstream supply chain, or how you look at the time and motion studies of your staff in the workplace on a factory floor. If you work in manufacturing or automotive, then data becomes increasingly more complex. Because everything we've talked about so far is data that is alphanumeric, it's word to numbers, it's the stuff that the corpus of the internet was trained on. But when it comes to trying to invest heavily in artificial intelligence and machine learning, then those kinds of ‘Old World’ industrial businesses need to start considering things like their intellectual property, their IP as in schematics or scientific notation, it's drawings or physical prototypes. And a lot of those things are not machine readable. And if you're about to invest heavily in AI, then it doesn't necessarily make sense what data is. And so back to your question, I think if people don't understand a problem, humans generally don't like problems they can't solve. And if you can't understand it, or clearly define it, then how can you solve it? 

Daisy Powell-Chandler  2:10  

Yes, and the way you've described it there sounds compelling, exciting, but also totally nightmarish for most organisations. And really hard for one person in particular, if you're lucky enough to have a chief data officer or someone like that, to get to grips with all those different forms of data. Now, when I knew you were coming on I went back to one of the first ever episodes of this podcast which was in the midst of everybody getting used to the idea of GDPR. And I and several of the experts that I had on that episode argued, I think (I hope) quite coherently that GDPR was actually quite a good thing for company reputations. It persuaded them to clean up how they were dealing with data to focus on the people who wanted to hear from them, which was likely to improve their success rates, but also mean that they're mostly communicating with people who want to be communicated with, and that that reduces reputation risk. 

But it strikes me there's a lot more reputation risk lurking in operationalizing that data. There's a lot of reasons for people to be nervous about data. They're not wrong to be slightly nervous about that are they?

Alex Vail  3:20  

No, absolutely not. That uncertainty, that hesitation is at every level in a lot of these businesses. 

In May 2023 we set out to identify the most common causes of digital transformation failure. And over the last few months, we've talked to over 300 senior leaders, technical experts, domain specialists, CTOs, CIOs, CEOs, board members. It's highlighted across the board the difference between the kind of dependency that those businesses have increasingly on data and data driven technologies, and their competency to be able to work with it. So on the dependency issue, we found that 87% of senior executives and board members feel that their management information has become more complex over the last three years. 70% of them have become more reliant on AI and data analytics over the same period, and 78% of them expect to be largely or completely reliant on data to make business decisions moving forwards. Now, a third of senior leaders also feel that they are already spending more on AI and machine learning than their direct market competitors. Three quarters of them plan to increase spending between now and 2028. While 76% of technology executives we spoke to say they've experienced a failed digital transformation in the last five years. 

So that's the dependency stuff. But when it comes to looking at competency, we found that only 9% of executive team members and fewer than one in 25 board members in UK PLCs have any technology experience or background.

Daisy Powell-Chandler  4:59  

Crikey. So you've got boards that are increasingly relying on the outputs of these technologies, and relying on people telling them what's important, and they understand that their businesses are going to be increasingly reliant on this stuff, but they are being left behind in the skills race in terms of how they interpret that. 

Alex Vail  5:19  

Yeah. When it comes to looking at AI and machine learning specifically, 58% of them don't have any AI experts in the top three tiers of management, despite the fact that they're increasing investment. 86% of the CTOs and CIOs that we talked to expressed low or no confidence that their workforce has the digital culture and skills to be able to complete their digital transformations, or to meet their data strategies. Three quarters of experts say that lack of digital culture skills and talent are the biggest risks to digital transformation failure. 

Daisy Powell-Chandler  5:55  

I think anyone hearing those stats, first off thinks ‘gosh, this sounds actually a bit irresponsible. You're starting out on a build process, you don't have the right people to finish it. You don't have the right people to plan it, and you don't have the right people to manage it.’ Is it irresponsible? Or is that just the reality of being at the forefront of fast moving tech? It's, you know, it's like the bridge where you're building as you go along?

Alex Vail  6:19  

Yes. Short answer. The people that get to the tops of these organisations do so because they're experts in their field. So in automotive or transport, or tourism or hospitality, they generally get there because they have stayed in their lanes, they've stayed in their lanes to a point where they have world leading expertise. But those lanes are very rarely tech. 89% of the biggest companies in the UK are older than the internet. That means that most companies, certainly most large companies, do not have digital technology hard-baked into their DNA. So it's perfectly understandable that senior leaders in those spaces don't have technology experience or background. 

From the evidence we've seen (and it's not our research) the story is slightly different in the US, where actually if you start identifying the largest businesses in the US, quite a significant proportion of them are 20 to 30 years old and they're tech companies. So there's a great deal more technology experience. But in the UK, certainly, those kinds of scale organisations, the ones we talked to, on average were 107 years old. For them technology isn't a reason for being, technology is just an enabler. It enables them to make products faster or better, or sell them.

Daisy Powell-Chandler  7:47  

But it becomes a lot more risky, rolling out new technology to a company that is 1000 strong than baking it into a company that still has only 25 to 100 people. Nonetheless, all this technology is coming at us. I suppose there's an inherent question here, whether we have enough senior managers who can understand this stuff to spread around, or if we just have to accept that they sit in pockets of expertise. Can we do without them? Can we build them from junior analyst up? Or is it a major barrier to bigger older companies getting on board? 

Alex Vail  8:22  

Certainly, the bigger companies that we've talked to are, all of them, actually actively working on trying to upskill their junior staff and build their own sort of data science or data capabilities within teams. And they really invest quite a lot in their junior staff to try and build those up because data talent is incredibly expensive. There's a ferocious competition for talent at the top, across both the UK in the US, and in every other country, actually. So a lot of companies are trying to build their own rather than by their own talent teams. 

But there really isn't the same level of priority on understanding what makes a good data strategy at the senior levels. When companies are hiring new exco members or bringing on new board members, quite often it's people who understand compliance or you know, if you're in a regulatory space, like banking or defence, then your priority is always going to be on compliance safety, meeting your regulatory requirements. And so there's always a priority there on bringing in board members who have that kind of legal or regulatory experience, and it hasn't become immediately apparent at the top of most of those companies that their data strategy is about to start driving a huge amount of their business. 

And it just goes to show in the numbers that they've currently got. And the companies that we've spoken to aren't actively trying to improve that, kind of, hiring thing at the top. Which is why we're trying to work on helping to upskill and creating new ways of training, retraining and reskilling the people who are already at the top of those businesses, who are already experts, and just making sure they have the right awareness. A lot of it is a mindset shift from risk aversion to risk awareness.

Daisy Powell-Chandler  10:28  

Yes, because it sounds like, well we've talked a little bit about, that there's a bunch of reputation risks around not getting the right people, about not moving fast enough. But there's clearly a whole series of reputation risks around the people at the top, either creating strategy without understanding the implications, or not understanding the outputs of the data that they're being fed. 

Alex Vail  10:51  

I spoke at an event a couple of weeks ago, on a panel with a General Counsel and the Head of Data Strategy, both from massive global corporates. And the Head of Data Strategy, said that whenever she tries to pitch a really important piece of data-related information to the board, or to the executive team, that they tended to kind of glaze over. And the GC piped up with: 

“We don't look bored, we're scared. We’re scared of how much it’s going to cost to fix. We know they’re real problems. We can't really get our head around what they are, and we just know it's going to be expensive.” 

And so that was quite an interesting shift. The growing awareness within those top teams, that they don't know enough. But the problem is starting to look quite insurmountable for many of them. And it comes back to the earlier point, you know, if you can't define what data is for you, and ou can't quite limit or box in the amount of headspace that data requires, that it's easier to kind of go ‘we'll look at that next quarter.’

Daisy Powell-Chandler  11:59  

Yes, and I think that's something that isn't isolated to the private sector either. One comes across it quite a lot with government departments who are, understandably given the history of some of them, very nervous about committing to large data projects. But of course, doing anything big these days involves large volumes of data. So, how do we get around that? You talked about upskilling those people, is it also about how we talk to them about data? 

Alex Vail  12:29  

From an industry perspective, the way we need to approach this, the way we're trying to approach this with the Data Strategy Alliance is by building out that not-for-profit, neutral convening space, that is a safe space to come into to admit that you don't know what you don't know. And to encourage peers, at all levels in different businesses, to be able to share best practice and share ideas. So rather like with your podcast, you know, we're looking at a horizontal challenge area rather than industry verticals. So, if you look back at just some of the guests that you've had on, such as  McDonald's, Pfizer, Suez, Centrica, National Trust, probably all have exactly the same challenges when it comes to culture, communications, technology and digital strategy, but there's no reason they would ever work together on those things.

Daisy Powell-Chandler  13:27  

Yes, exactly. But as you say, how many situations are there where you get those people in the same room? The one thing that this conversation has sparked in my head is - isn't this all just change management? And people have talked for, I mean probably for a century now, about how big and scary change management is. Is this just the next big transformation challenge? Or does it have some unique features? Is dealing with data something different from other forms of change?

Alex Vail  14:00  

Yes, and no. With all of the companies that we've spoken to, they come down to the three kind of same challenges. 

The first one is that embedding digital culture is really, really hard. New Tech deployment feels disruptive, it breeds uncertainty. The biggest challenge for any transformation, whether it's a data based change or a non data based change, is that it’s never the technology actually, it's the humans. There's a really big comms piece here, I think, around including everyone, especially senior management, on the journey to developing that kind of digital mindset. That underpins a lot of our work. 

The second big challenge is that successful data strategy, which is the thing that we're kind of focusing on, needs to come from a place of knowledge and insight. So to your point, AI is in the news every day but business relevant insight is really, really rare. So we're looking at a way to kind of replace that tech jargon with actionable intelligence about how data, about how technology, is impacting those businesses in real terms. So the people, profit, profitability, productivity, planet, and how those businesses interact with the world around them and with their employees and their stakeholders. 

And the third thing is around competitive instincts. So competitive instincts we find stifle innovation completely. Companies are really scared to share but executives know that collaboration can yield results. What we're trying to do is create a safe space for them to be able to come together, share those ideas in a non competitive, totally compliant, risk-free and exposure-free way.

Daisy Powell-Chandler  15:49  

Well, data remains a massive challenge. It's a big technical challenge. It's a big hiring challenge. It's a big change challenge. It's a big comms challenge both to your board, to your internal stakeholders, and probably to your consumers. Although we haven't tackled that as much in this conversation, as we often do. The great news is that a lot of these skills are going to be useful right across industries and sectors. So you can nab your very rare staff from loads of different people. But they all need upskilling. So there's also a big training challenge in here. 

And on top of all of that, you're starting a whole new industry association, which also isn't an industry association, it's a ‘horizontal association.’ How's that going?

Alex Vail  16:40  

Well, I'm not gonna lie and say it's the easiest thing I've ever done. The truth of the matter is I really like trade bodies, and I’f be daft not to recognize my own bias in this. 

Daisy Powell-Chandler  16:52  

Why do you love trade bodies? That seems like a very niche interest.

Alex Vail  16:55  too fast - will sort

I've seen when they really work, and I've also seen when they don't. The best exemplar of why trade associations work really well, I think, is probably the pandemic. Like a lot of businesses in the pandemic, a lot of trade associations furloughed their staff and shut their doors. But some stayed open. Not only did they stay open, they hired like Billy Oh, they rolled up their sleeves, and they convened entire industries to achieve things that no one would ever have thought possible. 

Membership associations are at their absolute best when they offer firms the opportunity to set aside competitive instincts to collaborate. And then there's the other angle, which is the kind of not-for-profit angle. Digital transformation is an incredibly lucrative market. Every single professional services, IT, technology accounting firm seems to be an expert at helping those, you know the 89 percenters, those firms that are older than the Internet to help them to digitally transform. And one of the things we discovered from talking to people was that they're kind of crying out for a nonpartisan, unbiased, non competitive, nonprofit making opportunity to really trust. And that trust element is so so important, because we're asking them to set aside their competitive instincts and work together on a systemic challenge, that is, frankly, more complex, more pervasive and more difficult than most organisations can solve on their own. Creating that environment certainly feels like it's the only way we're going to succeed. 

Daisy Powell-Chandler 18:39

It sounds like sound logic to me. 

Alex Vail 18:41

And one of the things we're working on with a pilot group at the moment is something we've called the ‘digital success framework.’ So it's a prototype framework for what the research has shown are the ten markers of digital transformation success. And five of those things are comms related activities. So there's a really big role to play in that it's about sharpening the message and making sure that you're really consistent, but also that you're really empathetic. And so that’s stakeholders, that's your employees, your customers, your shareholders and the media, and understanding how different people perceive the things that you're trying to say. 

Daisy Powell-Chandler  19:23  

Well and also a prompt to remember to communicate about these things. I think often, especially if the message isn't fully getting through up to a board level, sometimes it doesn't come back down again to comms level. And the temptation is to think that's a technical thing - maybe stakeholders don't want to hear about it, maybe it's something that just happens in the background. So I think just having a prompt that, no you need to be communicating about this. It's a reputation risk that you need to be in front of, and you need to have a plan for, sounds utterly vital. 

Let's wrap up then by putting you on the spot and saying, what do you think are the key things anyone listening to this should be bearing in mind if they are currently struggling their way through or beginning to contemplate a major digital strategy project? 

Alex Vail  20:10  

Let's focus on the soft skills that people need. Resilience, persuasion, negotiation, being able to read a room. You can't expect all of the people you're dealing with to be in the same place. Transformation is hugely unsettling, and I haven't yet come across any organisation where they have such a strong sense of psychological safety that completely rearranging the way somebody does their job doesn't shatter that. 

If you're in an organisation going through a transformation, and especially if you're working in comms or reputation, my advice would be to try and identify as quickly as you can the people who are likely to be your most enthusiastic supporters, and persuade them to become advocates for the change that you're pushing. They won't convince everyone, but if you kind of pick out the influencers and you can get a whole bunch of them, you can probably do far better than you can without them. 

Embracing uncertainty is hugely beneficial. It's okay to have a target destination, but you need to be sort of prepared to be a bit more flexible about how you get there. And obviously, being collaborative is really, really important. If you're asking your colleagues to keep an open mind to the benefits of change, it helps if you can expose yourself slightly, so that you can let them know that you're open to input and ideas. While you shouldn't lose sight of your end goals, it's important to be a little bit open to how you might reach them. 

And the final thing, probably the most important thing, is not to be afraid of failure, which I know runs anathema to every reputation professional I've ever worked with. But it's an essential characteristic of agile methodology. So, in times of uncertainty, your colleagues might be afraid to try something or do something that hasn't been tested before. And so one of the things that's quite important is to step into any kind of leadership void and make decisions. And sometimes they might be the wrong decisions, but it's okay to make the wrong decisions as long as you learn from them, and you are prepared to iterate. So if you make the wrong call, and it goes wrong, to then hold your hand up and go, ‘that didn't quite work, and here's why it didn't work, we've learned why it didn't work and we're going to do it differently next time.’ And if you can show that vulnerability and that flexibility, people will be far happier about following you into the void of change.

Daisy Powell-Chandler  22:43  

I think there's a lot of good advice there, even for people who are happily dodging their way out of digital transformation so far. It sounds like we're all going to be pulled into it over time so we may as well get upskilled now. It sounds like if this all was totally terrifying, then you probably need to get in touch with the Data Strategy Alliance. You're not fully launched yet, are you? 

Alex Vail 23:06

No, no, not quite. 

Daisy Powell-Chandler 23:08

So anyone who likes the sound of a big challenge should be getting in touch with you next year?

Alex Vail  23:15  

We're hoping to launch early 2024, but we've just opened applications for membership. Please get in touch if you think we can work together or be helpful.

That's everything from us. A big thank you to my guest,  Alex Vail, Chief Executive at the Data Strategy Alliance, the new nonprofit trade association. If you need help with digital transformation - you now know where to go!

I would love to hear from you which lessons particularly stood out from this conversation. I enjoyed Alex’s more general reflections on corporate change and the importance of communications. But his figures on how unprepared our boards and executives might be for the digital transformation whirlwind will probably be my biggest takeaway.

If you've enjoyed this episode, I hope you'll tell your colleagues and perhaps write us a review on your usual podcasting app. I know everybody says it but it really does help new listeners to find the show. Thank you as always for listening to Why Everybody Hates You - it is great to be back for Series Five. And remember, you are not alone.