Nowadays, analytics and big data have become a vital part of high-performing corporations.
Management and leaders in the vast majority of companies within many industries are aware of the usefulness and advantages of big data analysis and analytics, such as providing innovative solutions and boosting company competitiveness (Marshall, Mueck and Shockley, 2015).
With the emergence of incomprehensible, variety, velocity, and volume of data, companies are aware of complexities that surround big data world. Those complexities do not arise from the technology-related area, but rather from poor leadership style. In order to successfully utilize big data and data analytics benefits, companies need to align company culture and apply changes to adopt data analytics and big data.
Understanding how to solve leadership and management issues
Primary leadership and organizational issues were identified by McAfee and Brynjolfsson linked with the transformation to a digital organization, namely decision making, leadership, technology, talent management, and also corporate culture (Brynjolfsson, 2019). Most of them related to people and organisational issues rather than technological. Nearly fifty percent of surveyed US executives in 2018 reveal people challenges as the biggest obstacle for a company to become digital and data-driven (Pugna, Duțescu and Stănilă, 2019).
Consequently, it is crucial to emphasize critical factors that support and allow managers and CEO’s to adopt Big Data and analytics faster as an integral component of their corporate culture (Mircoff, 2019).
Manipulating and extracting value from a huge amount of data is not only a technological challenge but a primarily complex task for a leadership (Tambe, 2014).
In order to become a company that supports big data, there are specific requirements, such as enhancement of culture, inquiry, transparency, and trust. Additionally, it is well-known that the leadership and managerial difficulties of big data outperform technical complexities related to the use of big data to solve business goals (Mircoff, 2019).
Leaders must be enabled to promote data-driven decisions and analytics (Bean, 2019). Chief data or Chief analytics officer take responsibility for pursuing analytics and the priority to use data analytics in order to solve (Mircoff, 2019). That also means that those created positions increase the chances of analytics being integrated into corporate culture due to the fact that analytics leaders now are highly influential and powerful
It is important to emphasize four new leadership positions that take on the challenges of handling analytics and big data for companies. The Chief Data Officer is a senior position that is increasing in popularity, and it is alleged that 91 % of big companies will hire CDO by 2020. CDO is the data architect and data owner who has to set data strategies and definitions. Commonly, the role of CDO is mostly focused on finding data initiatives which will add to the understanding of business and speed of deployment to incorporate these initiatives
The data scientist will become very successful as leaders if they are good in their business insight and are able to ask proper questions to the work-related area (Mircoff, 2019).
Analytic roles play a crucial factor in incorporating real-time data that develops understandings of business. Highly effective companies create Chief Analytic Officer position in order to interact with the C-suite board and suggest their professionalism to the CEO. Commonly, the CAO maintains forward-thinking progress (Mircoff, 2019).
Last but not least, the position of data leader or data manager that builds and organizes data. The company also could improve organizational culture to embrace analytics via investing in employee training in analytics.
A crucial factor for an organization to become a leader in big data and analytics is to create a culture that appreciates trust and transparency (Mircoff, 2019). This is a topic that can be observed not only from the analytics viewpoint but all over leadership theory. It is important to build a corporate culture that values information transparency and supports an environment of openness and trust (Mircoff, 2019).
This idea tailored to present one’s genuine self by discussing thoughts and feelings openly within proper borders. Via openly demonstrating performance metrics, the company counts itself responsible for developing weak realms and inspire employees to present innovative and new solutions (Teisberg, 2015). Data must be easily accessible in a user-friendly manner.
Other factors that must be implemented by leaders in organizations that are willing to embrace big data and analytics is involving in the corporate culture of innovation (Mircoff, 2019).
Employees of all ranks must feel valued and comfortable and must be able to propose innovative ideas and be confident that their solutions are head and value. Successful companies carry out innovative aims via promoting cooperation and enabling time and space for creative and imaginative thoughts and solutions (Mircoff, 2019).
Case discussion: Erik Peterson
Bureaucracy flourishes on a Lack of Responsibility.
That supports Erik Peterson case by narrating that, the company failed due to poor communication and feedback system within the company. Formally company had a bureaucracy structure of leadership. However, neither higher-level management nor employers were trying to communicate between each other well in order to get the job done smoothly and quickly.
Instead, everyone was considering Erik Peterson responsible for both Higher level and lower level management tasks and issues. That happened due to lack of discipline and work commitment. Therefore, it is reasonable to conclude that the company's problem was related mainly to leadership style, namely bureaucratic leadership style, where people failed to communicate with each other, and the company was suffering due to the people and management factor.
Additionally, Eric Peterson himself failed to build a formal and work relationship with his co-workers, and none of his colleagues treated duly and listened to him during meetings and when he was trying to solve actual company-related issues they ignored him.
He failed to declare about disobedience and poor communication between layers of hierarchy to the company leaders, instead, Erik Peterson was polite and friendly to everyone what eventually led to the situation where everyone from the CEO to employees was upset about his performance in a new job and fired him due to incompetency.
That happened because of poor company leadership and management style not because of technical issues or issues related to less skilled employees. Therefore, traditional leadership and organizational behavior theories undergo severe changes when new IT companies emerged, and big data with business analytics started playing a vast role in organization performance and success. Leadership styles and OB theories had to adapt to changes and bring novelties to new trends.
In case of the Erik Peterson, within an organization, an employee of all ranks did not feel valued and comfortable and was not able to propose innovative ideas and be confident that their solutions are heard and valued.
Therefore, it was chaos in the company in terms of getting tasks done in time, and employees were not expressing openness and transparency within the organization, which is a vital element of data-drive or digital organization which embraces big data and analytics. Additionally, there was a lack of innovation. Consequently, all these factors, as mentioned above, prove that bureaucracy in the organization is irrelevant leadership style, and companies must change and adapt novelties in order to succeed and thrive.
Real-world business press examples (JPMorgan)
JPMorgan CEO Jamie Dimon discussed the topic of bureaucracy within big organisations like JPMorgan (Lebowitz, 2018). Bureaucracy murders innovation, slows down, making decisions, and expels good people. Leaders have to constantly try to struggle and limit the increasing peril of bureaucracy within their companies (Lebowitz, 2018).
Firstly, limit inner meetings. Internal meetings could be vast money and time waste. In case of the urgency of a meeting, arranger must prepare in advance (Lebowitz, 2018).
Secondly, rethinking common company procedures. Rethinking and reimagining standard organizational process from zero (Lebowitz, 2018).
Finally, autonomy is key, as people need freedom in order to come up with solutions they think are best. To do so, they need to be provided with required recourses and authority, and they need to understand that it is okay to make mistakes and won't be punished for them (Lebowitz, 2018).
Thanks to the Netflix leader Reed Hastings's, the company continues to flourish, going into new areas and evading traps of bureaucracy. Netflix leadership focuses on a couple of crucial elements: responsibility and freedom (Wilder, 2018).
Employees of Netflix are empowered with the freedom to perform the strategy of the company in their actual tasks and use it to carry out the best performance (Wilder, 2018).
As an outcome, the company does not face a lack of innovations carried out by employees, such as new content, versatile hiring, and campaigns of social media. In addition to this, employees decide when to go for holidays and travel expenditures. There are no company-imposed rules (Wilder, 2018).
The leadership of Netflix employs very qualified people and makes the mission clear for them and inspires them to make decisions that align with this mission (Wilder, 2018).
Every hierarchy level is expected to support information and set a task so that decisions can be made by those who will be responsible for performing them. In this sense, employees completely engaged in delivering the best quality that aligns with the organizational vision (Wilder, 2018).
- Bean, R. (2019). How Big Data and AI Are Driving Business Innovation in 2018. [online] MIT Sloan Management Review. Available at: https://sloanreview.mit.edu/article/how-big-data-and-ai-are-driving-business-innovation-in-2018/ [Accessed 19 Nov. 2019].
- Brynjolfsson (2019). McAfee, A. and Brynjolfsson, E. (2012) Big Data the Management Revolution. Harvard Business Review. - References - Scientific Research Publishing. [online] Scirp.org. Available at:https://www.scirp.org/(S(i43dyn45teexjx455qlt3d2q))/reference/ReferencesPapers.aspx?ReferenceID=1644568 [Accessed 19 Nov. 2019].
- Lebowitz, S. (2018). Jamie Dimon says bureaucracy is 'a disease' — and JPMorgan takes 5 steps to combat it. [online] Business Insider. Available at: https://www.businessinsider.com/jp-morgan-jamie-dimon-bureaucracy-2018-4?r=US&IR=T [Accessed 19 Nov. 2019].
- Marshall, A., Mueck, S. and Shockley, R. (2015). How leading organizations use big data and analytics to innovate. Strategy & Leadership, 43(5), pp.32-39.
- Mircoff, E. (2019). Leaders Role to Create Organizational Culture that Embraces Big-Data and Data Analytics. [online] Ohiostate.pressbooks.pub. Available at: https://ohiostate.pressbooks.pub/pubhhmp6615/chapter/leaders-role-to-create-organizational-culture-that-embraces-big-data-and-data-analytics/ [Accessed 19 Nov. 2019].
- Pugna, I., Duțescu, A. and Stănilă, O. (2019). Corporate Attitudes towards Big Data and Its Impact on Performance Management: A Qualitative Study. Sustainability, 11(3), p.684.
- Tambe, P. (2014). Big Data Investment, Skills, and Firm Value. Management Science, 60(6), pp.1452-1469.
- Teisberg (2015). [online] Files.transtutors.com. Available at: https://files.transtutors.com/cdn/uploadassignments/2657137_2_clevand-clinic--ass-1-.pdf [Accessed 19 Nov. 2019].
- Wilder, J. (2018). 2 Things Your Company Needs to Fight It.. [online] Medium. Available at: https://medium.com/the-mission/bureaucracy-sucks-2-things-your-company-needs-to-fight-it-365b05e0c25d [Accessed 19 Nov. 2019].
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