What is the MOST important KPI missing from a CIOs performance measures?

Breakthrough innovation often comes from un-expected quarters. One simple KPI can turn your enterprise into an innovation powerhouse..

My answer is: ‘Extent of enterprise-data-democratization’ i.e. number of data-attributes available to employees who want to innovate.

Why? Because once you start measuring it and improving on it, you will see a major increase in innovation in your organization.

What’s the evidence? There is evidence worth at-least $1.5 trillion, yes trillion, supporting this.

In most large organizations enterprise-data is not openly available to the staff to use it and innovate with it (for data-analysis, new applications, and new ways of doing things). Instead, it is locked down and controlled by each function and/or IT. This does not allow data to be used by interested employees to develop and implement innovative ideas. To the contrary, people who try to innovate are blocked. Their efforts are often called ‘shadow IT’ and killed as quickly as possible.

Also, it is clear that in the new wave of innovation data is the most valuable asset, for example, in Digitization, in Robotic Automation, in Predictive Analytics or Artificial Intelligence based applications etc.

So, a CIO who does not open up (following basic, limited rules of usage) the entire enterprise-data to the thousands of potential innovators is actually suppressing innovation and value-creation.

Opening up the data is not a radical idea. It’s applying the concepts behind the World Wide Web to the company. Tim Berners Lee once said, “WWW was designed a universal platform, it wasn’t supposed to dictate what it was used for. So, World Wide Web is an open platform and humanity does, what it does with it. And hopefully, on a good day, humanity does wonderful things with it. “

And WWW has done wonderful things! McKinsey in 2011 assessed the economic value of the Internet to be about 3.4% of 70% of the world economy — based on the 13 economies they studied. Anecdotally, we know that internet is now a more significant player.

My un-scientific guess is at that at least 2% of world GDP, worth about $1.5 trillion, is enabled by internet. This is a large number. But, it’s not much of a stretch — just add up the value of Apple, Google, Facebook, Amazon and Uber, and you’ll be in the $ 1.5 trillion range already.

Let’s not quibble about the specific figure. The point is that open platforms for information and data-sharing create huge economic value via federated innovation.

By democratizing information, the internet unleashed the innovation potential of every person with access to the internet. Internet succeeded as a value creator because it allowed everyone to innovate as they pleased, constrained only a limited number of simple rules. Can the same be repeated inside of your organization?

Let’s get back to CIOs. Is the data in your own organization democratized? Does everyone have equal access? Is everyone allowed to innovate as they please with the organization’s data, provided they follow some simple, limited rules? Can they build innovative applications with it, freely? I emphasize organization because most organizations don’t treat their data as if it is the organization’s data. Instead, the data is in silos — supply chain data, sales data, finance data, specific systems’ data and so on. It’s all there in the enterprise system, but most people can only build upon the data in their own silo, and very often not even that.

This situation is the outcome of many myths, fears and beliefs, which hinder innovation. One, is that only a function can best innovate with their own data. Two, that giving access to data might corrupt it or foster misuse. Three, that IT program dollars might get diverted to whoever comes up with innovative programs with ‘our’ data.

These restrictions mean that you are not creating value, unlike the internet, with assets that you already have. By NOT opening up the data to everyone in the organization, you are actively thwarting innovation and value creation. You are actively thwarting this because innovation is non-linear. In most circumstances, it should not be centralized (centralized innovation is referred to as ‘push-innovation’ by Gartner, who questions its effectiveness). It most often comes from unexpected quarters and from those who are close to operations and partners — be it Supply Chain, Customer Experience or Finance.

So, should you allow everyone un-restricted and unfettered access to enterprise data? No!! That would be foolish.

I am proposing that organizations provide API based read and write access to all non-PII and non-Financial data. Take your business objects (customers, suppliers, orders, pricelists, contracts, inventory, territory assignments etc.) wrap them up into APIs that can be used by employee (business, operations or IT) to do something better. APIs implement the basic rules to protect confidential data, but let majority of it be available for innovative uses and applications.

Can it be done at low cost? Yes. This is eminently feasible. There are enough enterprise data architectures available to manage this democratization without an enormous price tag within a reasonable period of time. (I’ll write more about it in subsequent posts).

In short, democratization of data is technically feasible at low cost, and can unleash unprecedented value-creation and innovation.

So, if your organization is not innovating at-scale, not implementing thousands of micro-improvements every year, not empowered to fix easily-fixable problems themselves then a VERY likely reason is that your employees, do not have the access to enterprise-data to solve their problems innovatively. You have not democratized your data.

My KPI will change all this. It will mean that a CIO will try to democratize-data i.e. maximize the ‘number of data-attributes opened up for innovation’. The KPI will flow down to IT managers for whom the roles will reverse!! They will be incentivized to provide data-access to as many innovative ideas and initiatives as possible as opposed to keeping it with them and treat it as a private asset. And, then you will be counting the break-through ideas and innovation that come because of your actions.