Lydia Jones is a business and legal data monetization strategist and adjunct professor of law at Vanderbilt Law School and Boston University School of Law. Lydia and her consultancy firm InSage LLC are the 2017 producers of The Data Monetization Workshop, an annual event that brings together industry leaders and data monetization innovators to discuss data-centric opportunities, address perceived challenges, and transform the C-Suite conversation. Learn more and register for the Workshop here.
You have defined data monetization as "leveraging data to generate value." I'd like to explore more about what you've learned as you talk to companies looking to get value from their data.
The role of Chief Analytics Officer or Chief Data Officer has become increasingly common as organizations try to focus their efforts on data monetization. From your experience, what kinds of companies have pursued this strategy and established this data leadership role? That is, what conditions need to be in place for a company to pursue this type of innovation?
I look at the data-centric ecosystems that exist in the private sector as broadly as possible, and that includes looking at how private companies are working with local governments to leverage data and to generate value for public goals as well. So to start, companies willing to learn from, or collaborate with, entities outside of their core industry is one condition. Another condition includes a willingness to view data as a business opportunity rather than as just a cost item in the CTO’s budget. Once data and data-centric revenue are seen as crucial parts of business operations, focusing on data opportunities analysis is key, and having the right skill set for that task is even more so. The shift from data as an anchor to data as an opportunity typically moves a company to consider whether, and when, to create a Chief Analytics Officer or Chief Data Officer position to address opportunities, to leverage data, and to generate value for the company, its partners, and its customers.
What kinds of distractions have you seen that may give a company pause in either creating a data leadership role or pursuing innovative data-centric monetization thinking?
A change in perspective about opportunities that may arise from data collection, data sharing, and data analytics, or from the creation of a new position such as a Chief Analytics Officer of Chief Data Officer, is not enough to fully leverage data monetization initiatives. A company must also change the internal conversation about perceived risks concerning data value and data monetization. Many companies misperceive risks, such as privacy risks, when valuing data and when assessing whether to engage in innovative data monetization initiatives. Companies that have opportunities to leverage data must resist being swayed by misperceptions about privacy. For example, many companies have a blanket rule against monetizing personally identifiable information. While this may be the prudent choice under some circumstances, many companies adopt this position as an automatic universal rule because of a perceived, but oftentimes unfounded, risk concerning privacy. For example, data monetization opportunities arising from the collection and sharing of personally identifiable wellness data are routinely rejected under the perception that privacy rules – such as those found in the HIPAA Privacy Rule applicable to personally identifiable health data – prevent the monetization of wellness data when in fact those rules usually don’t.
This kind of thinking based on misperceived privacy risks undermines innovation. One need only look at the popularity of mobile applications through which consumers pay to give real-time generated personal data – from retail purchases to geolocation data to biometric data – to companies in exchange for data analytics and insights. When consumers are demanding highly personalized products and experiences, it becomes a necessity for a company to consider, or to reconsider, how to best generate value from personal data. Yet for those companies that misperceive the risks associated with data monetization, these opportunities are left to competitors.
Can you share a few examples of the kinds of entities that you think are doing innovative things with data and data monetization?
Innovative data-centered projects span across the corporate sector, the nonprofit sector, and the local government sector. Big Data Quality recently published Big Data 50 -- Companies Driving Innovation, which is worth checking out here. And in the nonprofit sector, data scientists are moving into the role of the chief data officer. DoSomething.org is an example of a nonprofit that hired a data analyst for the dual role of data scientist and chief data officer nearly three years ago. Finally, in the local government sector, we are seeing innovative leaders creating the chief data officer position to support data-driven strategies aiming to serve public goals such as increasing efficiency in public education, fire safety, and public health. In fact, Nashville just joined the short list of innovative cities – including Boston, Chicago, New York and Los Angeles – when it hired its first Chief Data Officer, Dr. Robyn Mace, in 2016.
Looking forward, 2017 holds significant promise for companies willing to engage in proactive data monetization discussions that redefine data monetization as “leveraging data to generate value,” that thoughtfully consider and assess perceived privacy risks, and that consider data as a corporate asset to expand business opportunity and competitive advantage.