The average age of large company chief executives is over 50. That means they have seen and navigated quite a few global economic and macro environment shock moments through their managerial careers and several in this century already – such as 9/11, the $145 oil spike and the Arab Spring. CEOs will rely on patterns and experiences from those prior episodes to help find their way through the unfolding repercussions of the Brexit vote. However, from a technology-related viewpoint, one thing makes Brexit rather different; this time we have ‘big data’.
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Perhaps it would be better to say that this time some CEOs have access to data science. ‘Big data’ is just a loose name for an asset or resource – the mountain of rich, high fidelity data from disparate sources that is amassing as a result of all internet-connected and digitally recorded activity. That resource is inert until you choose to do something with it. In recent years some companies have got their act together. They have assembled the tools and more importantly the people who can analyse and exploit the new data resources to see better – what is going on in the world. If you can see what others can’t yet see – you have the opportunity to penetrate the fog and confusion of an economic shock and find a way through it faster. At a time like this, such capability should be a potential source of competitive advantage.
Most business leaders and commentators seem to agree that Brexit is the biggest shock since the Lehman collapse of 2008 (though not quite as bad). We have to remind ourselves that most of the banking crisis that followed, played out before we really invented ‘big data’ or ‘data science’. As a Google Trend graph shows – these concepts we regard as so important today, just weren’t part of general business consciousness back then. Indeed the keystone technology that first made big data exploitation possible for most enterprises – Hadoop – wasn’t publicly available until 2011.
But what can a chief executive really do with big data and data science? How can these complex tools help right now with the problem of navigating the Brexit crisis? I can think of three things CEOs can call for, from their teams – if they have invested in the capabilities.
- Social Listening – analysis of public social media can provide insights about trends in societal debates, markets and political mood shifts that can help inform business leaders about key transition points between different business scenarios.
- Impact similarity comparisons. If you have historic data from prior market insecurity episodes such as the financial crisis, you could run detailed comparisons. Are people reacting the same way or differently? Are the dips and recoveries – in ordering behavior or sales cycle times – sharper or shallower? Are they trading up and down between price points and products faster or slower? Where are the correlating factors and how can you predict recovery tipping points better?
- Machine data analysis. What can connected machine data tell you about what’s really going on? Urban public transport usage patterns, equipment idle time, shipping movements and many other kinds of sensor data from the connected machine world could provide critical trade flow and economic activity insights.
We are not really very far into the data science age. Techniques are raw, experts are in short supply and the methods of today will no doubt look quaint a decade from now. But Brexit is the first big business test of a new emerging data-driven strategic management science. This time, smart CEOs will rely on more that just the accumulated human experience and standard commercial transaction data gathering from a cabal of their closest colleagues. If you have invested in big data and data science capabilities in recent years – this is the moment to give them a real test.
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