We’ve made the point in previous blogs that analytics help hospitality executives achieve that critical balance between providing a meaningful guest experience, and meeting revenue and profit obligations.
The balance is achieved when analytics programs are promoted from departmental initiatives to part of enterprise-wide strategy development. Hospitality executives face the challenge of fostering this strategic analytic culture within their organizations.
Strategic analytic cultures have the following characteristics:
- Executive management commitment -- A strategic analytic culture starts and ends with senior leaders in the organization committed to enterprise-wide use of analytics, demanding “proof” for all initiatives and decisions
- Uses analytics to set business strategies -- Business strategies are set and justified with analytics, not gut instinct or aspiration.
- Commitment to Information Management -- Good analytics are nothing without good data. An organization committed to analytics is passionate about creating, cleansing, storing and accessing their analytics-ready information assets seamlessly across the enterprise.
- Enterprise use of analytics -- Not every department has to employ PhD statisticians, but widespread access to and use of analytics is necessary to be strategic.
- Culture of Fact Based Decision Making -- Organizations with a strategic analytic culture are driven to back up every decision with data. They don’t rely on gut instinct or past history.
Obviously, to achieve the characteristics listed above, organizations will need to invest resources in people, processes, organization, and technology. Any one of these alone will not get you there. Three focus areas help organizations build a strategic analytic culture:
- Business Analytics Skills and Resources
- Information Environment and Infrastructure
- Internal Analytic Processes
A focus on Business Analytics skills and resources involves finding the right balance of resources and making analytics more approachable. Your resource strategy must strike a balance between business acumen and analytical rigor. Make sure you have enough of each so that the analytics meet the needs of the business, and the business can be supported by the analytics strategy.
In today’s labor environment, analytical skills are in short supply. As you strike that balance, you will want to augment your technical resources by making analytics approachable to the business users as well. Highly graphical, wizard driven tools allow business users to quickly and easily visualize their data and apply analytics without needing to be PhD statisticians. They can find their own answers faster, and better direct your analytic resources to the problems that require deeper analysis.
The second focus area, Information Environment and Infrastructure, deals with what Natalie Osborn wrote about last week: upgrading your information architecture, bridging the gap between IT and the business, and capitalizing on advanced analytics, not just reporting.
A strategic analytic culture gets better answers faster with big analytics. A big analytics environment requires a different approach to information architecture. Relational databases do not store data in an analytics-ready format. Some modernization is required, and IT needs to be thinking proactively about future growth and development to be ready to answer the needs of the business as they arise.
To continue to be responsive, IT will need deeper relationships with the business. They must understand how and when users will need the information in order to architect the right environment to deliver it. Being strategic means becoming proactive instead of reactive. Your analytics environment needs to accommodate advanced proactive analytics, rather than simply reporting and visualization. Only with these high-powered, high-impact analytics can the organization anticipate the future rather than reacting to the past.
Finally, focusing on Internal Analytic Processes sets the organization up for a sustainable, strategic analytic culture. Analytics need to be managed as an ongoing process -- not a one off project, and internal processes around the analytics program should facilitate collaboration.
Only when you have systematized processes for accessing data, exploring that data, creating models, deploying the models into production and operationalizing results, can you facilitate extension of analytics across the enterprise. Collaboration between departments and users means decisions are made considering all possible information, not just what is available to one department. When departments collaborate in this manner, enterprise-wide business strategy is set using the analytic results.
So, how do we get started?
The journey towards a strategic analytic culture starts with a small, highly visible, step. When I talk to executives that have established strategic analytic cultures, the process started from one of two directions, either a CEO that was committed to analytics and fact-based decisions (like Gary Loveman at Caesars), or a department that was created as a “skunk works” project which grew in visibility as they demonstrated success.
The second path is hard, but more likely what most organizations will face. You need to find a group of employees that are willing and able to take on the challenge, and pick a business problem that is easy to define and potentially impactful. You may want to think about an interdepartmental project (like between revenue management and marketing), to demonstrate collaboration along with innovation.
Make sure you can answer “yes” to all of the following questions:
- Is it a business problem that resonates with the organization?
- Can it be easily defined?
- Is it relatively small in scope, but relatively large in impact?
- Are the objectives easily measurable?
- Does the required data exist?
- Do the skill sets required to derive results exist?
- Is the process repeatable, or is there at least a path to repeatability?
- Is there an executive who would be willing to provide support and guidance (formally or informally)?
As you embark on the project, ensure that you have clearly defined the personas, scope, and objectives upfront. Ensure that involved resources are empowered to prioritize this project and set up open lines of communication. Plan for plenty of time for brainstorming, defining metrics, and gaining consensus across all key players.
Most importantly, once you demonstrate success, speak of it loudly and often across the organization. Ensure your executive sponsor socializes the success with his or her peers. Have another similar project ready in the pipeline in a different part of the business to get more executives involved. And then brace yourself for the floodgates to open. The executives I talk to say that once the momentum from a few demonstrated successes started, the projects came flooding in, and their positions within the organizations gained visibility and prestige quickly.
It’s a marathon, not a sprint.
Keep in mind that this is a process. It takes time, careful planning, and a phased approach. You must be patient and diligent, but the results are worth the effort!
We’d love to hear from you? How are your efforts to create a strategic analytic culture coming along?
This originally appeared on the SAS blog, the Analytic Hospitality Executive.