The data revolution is relentless, uneven, democratic, game changing, terrifying, and wondrous. We are creating more data than ever before, sharing more information on devices fixed and mobile, seeding and feeding from Internet clouds—and we’re doing it faster than ever. Digital natives such as Amazon and Google have built their business models around analytics. But many leading players still struggle to harvest value, even while investing substantially in analytics initiatives and amassing vast data stores.
A simpler landscape might call for a road map. Data analytics requires a reimagining. We are witnessing not just a shift in the competitive environment but the development of entire ecosystems—linked by data—that have the power to reshape industry value chains and force us to rethink how value is created. Consider medicine brokerage or automotive navigation or any of the thousands of examples where businesses and customers interact with each other in ways that were unfathomable just a few years ago.
Data assets, analytics methodologies (including, but by no means limited to, machine learning), and data-driven solutions make it essential that leaders contemplate their company’s own data strategy and the threats and opportunities that go with it. At the same time, many executives have the feeling that advanced analytics require going so deep into the esoteric information weeds, and crunching the numbers with such a degree of technical sophistication, that it becomes tempting simply to “leave it to the experts.”
We hope this issue of the Quarterly will help leaders avoid that mistake. My colleagues and I have sought to illuminate the leadership imperative in two ways. First, we’ve created a sort of practitioner’s guide to data analytics for senior executives. “Making data analytics work for you—instead of the other way around” advances eight principles that leaders can embrace to clarify the purpose of their data and to ensure that their analytics efforts are being put to good use. Second, in “Straight talk about big data,” we’ve suggested a set of questions that the top team should be debating to determine where they are and what needs to change if they are to deliver on the promise of advanced analytics. Regardless of their starting point, we hope senior leaders will find these articles helpful in better assessing and advancing their own analytics journeys.
Some of this issue’s other areas of focus also are connected with the power of analytics. Consider the way new technologies are changing supply, demand, and pricing dynamics for many natural resources, or the way China’s digital sophistication has continued to expand even as the country’s growth has slowed. Indeed, the digital revolution and the data-analytics revolution are ultimately intertwined. You can’t do analytics without streams of digital data, and digitally enabled business models depend upon advanced analytics. Leaders who focus on the big issues we’ve tried to stake out in this issue—on the essential purposes, uses, and questions surrounding analytics—stand a better chance of cultivating the necessary intuition to guide their organizations toward a more digital, data-driven future.
Download the full issue of McKinsey Quarterly 2016 Number 4 (PDF–4MB).