SINGAPORE (Jan 23): Data has become inextricably entwined with trust. Where data alone was once an organisation’s unparalleled asset, it must now factor in trust. Data matters. But trust determines its value.
This comes from a recent study conducted by the IBM Institute for Business Value and Oxford Economics. For this study, we spoke with more than 13,000 C-suite executives from 98 countries about data, the value they derive from it, and what it takes to lead in a world awash with data. A total of 183 participants polled were from Singapore, including 28 CEOs and 36 CFOs. All of Asean had 623 participants, including 113 CEOs.
“Trust has now passed its tipping point,” note the authors of the report. “How organisations utilise, safeguard and share data with their customers and partners can create an extraordinary advantage. But achieving it will first require rebuilding trust — trust from customers, trust from within the enterprise about its own data, and trust across the ecosystems in which organisations operate.”
The study notes that the trust customers once gave, almost blindly, to brands and institutions has been slipping for some time now. Likewise, data sharing among organisations has become constrained by a mutual lack of trust. It may even jeopardise the extraordinary revenues that organisations expect to gain on new business platforms. Complicating matters, the promise of AI depends on even deeper levels of trust, in both the AI models themselves as well as the revelations they produce.
An organisation’s ability to earn a trust advantage depends on at least two factors: (1) how good it is at creating trust in data, and (2) how well it engenders trust from data. Once the trust advantage is established, new possibilities for innovation and revenues can emerge. The same goes for data, as companies attempt to gain insights from data by viewing it from different lenses. “We’re building the ability to look at data and analyse it from different angles, so that we can forecast the needs of our patients and get a better idea of the path we should take,” says Leong Huat Goh, deputy group chief HR officer at SingHealth.
Trust in torchbearers
The study classified every participant into one of four stages, starting with the most advanced: Torchbearers, Explorers, Builders, and Aspirationals.
These four categories were mapped for qualitative readiness, or the extent to which data and business strategy are integrated, with a C-suite that recognises data as a strategic asset and has an enterprise-wide data culture. The categories were also measured on quantitative aspects, including the ability to create value from data; to access, extract, and link data together; and finally, to derive insights from that data.
“Torchbearers” represent a unique group that consists of just 9% of surveyed organisations. They have fused data strategy to business strategy, with trust as the plumb line. Operating in a data-rich culture, they generate higher revenue growth and profitability than their peers.
We learned that data-driven leadership is determined by the levels of trust an organisation can create — among its customers, the people inside the enterprise, and the partners across its ecosystem.
Customers: The trust economy
Customer trust has become the defining issue for leading organisations, reshaping their offerings and even their business models. Eight in 10 Torchbearers tell us they have turned to data to strengthen the trust they earn from customers.
What’s more, the Torchbearers consider their capacity to respect their customers’ data privacy as a core competitive advantage. The race is on to discover precisely where an organisation’s customers draw the line on privacy and what they consider a fair trade-off for their data. The prize for those who get there first is high-trust business models that differentiate them from their competitors.
All organisations face a future in which changing customer sentiment and new regulations could severely constrain their access to, and use of, prized personal data. This is as true for consumer data as it is for business partner data. Leading organisations recognize what is required — new approaches to data collection and protection, data sharing, and customer relationships. Three principles — transparency, reciprocity, and authenticity — guide their handling of data and how they engage their customers and business partners.
Enterprises: The human-tech partnership
The Torchbearers have achieved what others have not. They have inculcated a culture of data believers. Eight in 10 Torchbearers say the executives in their C-suite rely heavily on data to improve the quality and speed of the decisions they make. At the same time, they are fully focused on empowering all of their employees, not just their data scientists, to uncover insights from data.
Leading organisations are liberating their data, allowing it to circulate widely, without sacrificing their responsibility to secure permissions and safeguard it. Supported by their data-hungry culture, the Torchbearers have raised AI to the top of their agenda. Seven in 10 expect to make significant investments in AI, which can include machine learning, in the next few years. They are deploying AI to inform better decisions, infuse workflows with intelligence, and humanise the customer experience. They are moving AI from online to the front lines, into the hands of employees who interact with customers and business buyers.
Torchbearers understand that as AI permeates their enterprise, the need for trust in data — and in algorithms — soars to new heights. In turn, robust enterprise-wide governance becomes a board-level issue.
Ecosystems: The platform era
For most organisations, data sharing across partner networks — a function of mutual trust — continues to be a core challenge. However, the implications for an organization’s future are new.
For platform business model participants, learning quickly and continuously is a do-ordie proposition and a function of data sharing. New platform business models could rise or founder on the shoals of trust. Data shared among organisations in an ecosystem is already creating new and exponential value.
But deciding what data to share for winwin propositions — and what data to maintain as a proprietary advantage — is one of the most difficult decisions organisations have to make. Torchbearers are ahead of the others: six in 10 are actively sharing data across their partner networks.
Likewise, six in 10 Torchbearers are pursuing a strategy to monetise their data. With a monetisation roadmap in place, organisations can better determine what data they should share and what they should keep close. The Torchbearers stand apart from others in their ability to unite trust and data to surge ahead in their digital transformation. In each chapter, we have included recommendations, based on analysis of comparative data and in-depth interviews with Torchbearers, for how others can advance their own journeys.
The bottom line: Torchbearers follow five best practices that the rest — Explorers, Builders and Aspirationals — can start to implement in their organisations to close the trust gap within and without:
• Lead trust in data from the top. Put data-based decision-making at the top of the C-suite agenda.
• Empower employees to become citizen scientists. Liberate your data from the ground up.
• Push the envelope on data and technology. Expand your horizons on what data can do.
• Establish enterprise-wide data governance. Be transparent about your analytics and AI models, as well as your data processes, and establish enterprise-wide data governance.
• Leverage the power of hybrid cloud. Provide the scale for data proliferation as you broaden the range and diversity of your data sources.
The Torchbearers stand apart from others in their ability to unite trust and data to surge ahead in their digital transformation. Others who have started their digital transformation journeys can take a tip or two to get ahead and make trust as the core of their data strategy. As Marc Benioff, chairman, co-CEO and founder of Salesforce, said in his interview for this study: “You have to choose: What is your highest value?... I am all for success... but we cannot put success above trust.”
Arun Biswas is country managing partner of IBM Global Business Services, Singapore