Role of a Data Leader in an Inflationary economy

Prices are on the rise

US Inflation reached a new 40 year high

While you are consuming your news from your favorite source (hopefully not from Whatsapp forwards or other Social media sources :-)), I hope the Inflation talks have caught your interest.

The chart here shows the price increase for some commodity products (source: FRED, Biryani - self). While some price increases don't hit you hard, some do - for me, the price increase of an Indian dish - Chicken Biryani woke me up to the reality of Inflation :-).

Rising cost of goods means fewer purchases, customers making tough choices on what to buy and how many to buy. These then tend to directly/indirectly hit a company's bottomline.

Businesses typically respond to inflation by optimizing spend, reducing workforce, cutting down on R&D etc. While every leader in the company will look for ways to maintain their line of business and determine how to be profitable, the role of a data leader in this process can be ambiguous. In reality, data plays a crucial role in helping the company survive and thrive under these circumstances. Data Leaders must understand the role they need to play during these times.

Here are a few best practices that a data leader can adopt. These practices are based on the principles of DATA (Business Drivers + Automation + Tactical Leadership + AI)

1) Business Drivers

Re-align your Data Vision, Roadmap and Initiatives to renewed business drivers

During the inflationary times, it is very common for business leaders to re-align, re-focus on their business objectives. For example, a Sales organization might focus only on increasing sales in a particular product line / region etc, a Services organization might focus on reducing the operating expenses, a Manufacturing organization might look into efficiency, supply chain optimization etc. While the business leaders are working on the repriotization activities, a Data Leader should ask to have a seat at the table in order to understand and influence the business decisions and priorities.

Participate & influence in business reprioritization discussions

Data leaders should take a hard look at their organization's Vision, Roadmap and the Initiatives that are in progress, or planned for. Data leaders must then re-align their organization's priorities to match the priorities of the company. This should include taking a hard look at:

Technology transformation or large upgrades:

Do the technology transformations need to happen now?

How do these upgrades align to the renewed business objectives?

Depending on the financials of their company, their department etc, Data leaders must explore pausing some technology upgrades that might not add immediate direct value to the business objectives. At the same time, they should explore investing in new technology that helps accomplish business objectives in a cost-effective manner.

Improved insights:

Business leaders might be struggling to understand the marketplace due to rapidly changing circumstances and how it might impact their profitability. Data Leaders should focus on building key insights to help the business leaders handle uncertainty and also empower them to draw further insights by providing the required toolset.

By anchoring to key business objectives, data leaders must take a look at how to enable the business leaders with better insights and help them accomplish their business objectives. This might require the data leaders to shift priorities for their organization to help deliver those insights for the business.

Better Quality Data:

While better data is needed even in normal times, it is especially important during times like these. Better data means better decisioning. Without good quality data, businesses might inadvertently be making critical mistakes. Data leaders must make room in their organization's bandwidth to spend time on improving the quality and clarity of the data. They should focus primarily on the data that is needed for accomplishing critical business objectives. They should explore establishing tiger-teams that consist of business users and data analysts to help improve data quality for critical data fields.

Efficient Product management:

All of these require some rock solid product management in your organization. Ensure that they have a good pulse of the needs of the business. Not only should they be able to understand what the business is asking but also influence the business to embark on leveraging new insights and potentially new processes that can help the business to achieve their objectives and stay ahead of the competition.

2) Automate

During Inflation, it is a common practice for businesses to embark on initiatives that focus on operational efficiencies, reducing expenses etc. This is a perfect opportunity for data organizations to explore how to enable such efficiencies.

Do more with less. Work smarter not harder

Business process automation:

Explore capabilities such as:

• Robotic Process Automation (RPA) to automate some of the business activities and thus freeing up their key resources.
• Free up business user time by reducing the manual activities such as data crunching via Spreadsheets etc and automate them via data pipelines and dashboards/reports.

Automate data processes:

Times like these require a quick turn around for business asks. A data leader must focus on improving cycle time in their organization by focusing on:

• Automate data ingestion into their warehouses and make it Low-Code/No-Code.
• Test automation that can ultimately enable continous deployment (CD of CI/CD) with a secondary benefit of improving quality of the data.
• Automate data operations activities and reduce manual activities

3) Tactical Leadership

Inflationary times will test leaders. Leaders must draw from their experiences, and make effective use of their ideas in the workplace. Tactical leadership is very crucial for a data leader to not only drive their organization effectively but also to look for blind spots.

Employee satisfaction:

Inflation brings in unease in the employees. Although some argue that one of the drivers for inflation is increased salaries necessitated due to tight labor market, employees might continue to ask for more salary increases to compensate for an increase in the cost of living. This will continue to put more cost pressure on corporate leaders. Employees may also complain about burn-out etc.

• Consider benefits with higher perceived value (at lower costs)
• Consider flexibility / remote work, additional time-off, wellness days etc.
• Thank the employees, make them feel valuable, give them visibility. Ultimately, a show of gratitude towards employees goes a long way in improving employee satisfaction.

Gratitude unlocks the fullness of life. It turns what we have into enough, and more

Control Costs:

Cost of goods will continue to increase, leading to higher costs in most of the expenses a business has to deal with - including services, licenses, infrastructure etc.

• Negotiate for better rate (if that's relevant and makes sense) with vendors. Look at your contracts that are coming up for renewal and explore various levers to locking in at a better rate.
• Look at your contractor spend and explore a good resource strategy that allows you to hire quality resources for optimal price.

4) Artificial Intelligence

It is no longer a secret that Predictive / Prescriptive analytics provide leverage for companies to stay ahead of the competition. It also helps business achieve their objectives to improve operational efficiency, generate more revenue, gain more marketshare etc.

• Review your business objectives. If your service business is looking to cut average time they spend with a customer, then explore chat bots, virtual assistants etc. These help reduce the operational costs in the long run. They also enable better customer satisfaction and improve the stickiness of the customer.
• Leverage AI to predict potential business performance challenges and generate more accurate forecasts of inventory prices, logistics, demand and supply
• Leverage AI to improve real-time decision-making. This real-time decision making can position your business to have a competitive advantage.
• Generate high quality leads for sales reps by identifying patterns in consumer behavior faster and with better accuracy.
• Create targeted marketing campaigns to reach the right audience by leveraging the power of AI and data
• Leverage AI to also gauge employee satisfaction and productivity

These are just a few examples, data leaders and their organizations must gain business intimacy and thus unlock more opportunities. Invest in an analytics platform that enables you to execute the above strategies. Invest in people who can build AI models to help you unlock these key business outcomes.

Conclusion

The above approaches are not novel, but not easy to accomplish for a Data leader. Depending on the organizational structure and importance given to Data, the role of the Data leader to accomplish the above could get incredibly harder. Find that one use case that helps you win the trust of your business stakeholders and inflate the importance of Data.

I acknowledge this list is not comprehensive. I look forward to learning about other thoughts and ideas, please chime in with your comments.