The “Data Poverty Trap”

I’ve been thinking about this of late as I continuously have the “value” conversation with colleagues and friends, as well as reading many of you out there adding your thoughts on LinkedIn and other platform. I do think it’s a very valid and timely conversation that needs to occur and it needs to be done so in an honest fashion.

But, over the years of working with companies, I believe there is a trap that many of them have walked straight into, and most don’t even realise it. I call this the:

The Data Poverty Trap.

The funny thing is that once you are in it, the path to value gets harder and slower with every quarter, every year and every decade.

Let me explain.

Most businesses say data is important. Oh of course it is, because in part articles, analysts, consultancies and the general hoypoloi about it being some precious substance has elevated it to some form of Godly status and the people with it (that’s for another article).

Because of this you will see companies writing about it profusely in their company reports and saying it’s a “strategic” paradigm. But then you look at where they put the budget, the team, and the decision rights, and the truth becomes clearer:

data is still being treated like a cost to be managed, not a capability to be grown.

• In many cases it’s still parked under IT as is the data leadership
• It’s funded with what’s left over.
• It’s measured by efficiency metrics, not growth outcomes.

This specific take or angle tends to create myopic thinking, and most companies have inadvertently run over their own reports and summations about data. To go further, if an company does take this narrowed view, this is what tends to happen:

• They only fund what they can justify on a short-term cost line, so innovation dies in group think.
• They prioritise control over capability, so the people who need data the most can’t move fast enough.
• They build infrastructure without vision, so the business keeps running into the same brick walls.

Yes, one could potentially add far more examples here, but, I think there are enough people scratching their heads wondering why such glorious concepts such as self-service never takes off, why those “well thought out” AI pilots stall, and why the business still can’t get clear answers to obvious business questions that seem far more elusive than the Loch Ness Monster!

As always there needs to be a bit of a wake-up call and therefore let me be blunt:

You cannot build competitive advantage with a mindset of scarcity.

If you treat data like an internal service, it will deliver internal results, and most will be none the wiser. If you manage it like plumbing, don’t run around shouting from the rooftops, surprised that no one uses it to drive business outcomes. With that said, it’s also not a technology problem, or a governance problem. What it boils down to at the heart of the matter is that: it’s a business model problem.

You’re Poor Because You Chose to Be

Let me be absolutely clear, when I say data poverty, I don’t mean you aren’t swimming in the pride of data, glistening like Amazonian gold being plundered!

What I mean, is that you don’t have a system that turns data into decisions, actions, and outcomes, fast, repeatably, and at scale. Yes, and I’m sure that may be a big surprise to you because you have just invested millions into a system you thought was going to do that! It’s not that.

What I meant is that you have never designed for it.

You didn’t set up an operating model where data is infused into the core of how you run your business, a part of your DNA so to speak. You decided to set one up one where it’s bolted on, often late, and always magnanimously underfunded (in a self-defeating manner). That’s why when we go into companies, we always hear these three words “everything feels reactive.”

It’s another reason why your team is so laser focused or even obsessed with building dashboards instead of delivering commercial impact. It’s another reason why your executives don’t trust the numbers and, in many cases, more than you would like to admit your front line staff don’t use the tools.

You can have all the tools, technology, and bright talent in the world! But if your data model is built to support the cost line, you’ll never get those exponential returns you have been promised in every article or conference key note that you have so admirably listened to and believed.

Flip the Model and Move From Cost Centre to Growth Engine

With this “data poverty trap,” this endless cycle of cash out and not value in, this lifecycle of reactiveness, you need to ask the bold question: how do we get out of the trap?

The question you need to be asking in the halls of your own internal hallways is this: “How can we use data to drive new growth, better decisions, and real market advantage?”

Here’s what that looks like in practice:

1. Reposition Data as a Growth Investment: don’t fund data like back-office IT. Fund it like you would fund a product or a market expansion. You spend inordinate amounts of new ERP or CRM systems that infinitely fail and a fraction of what you spend on data. Don’t continue to be foolish in your pursuits of thinking you will be better than others. Nope, you don’t start with the right approach, and you don’t listen to those that tell you to do it a better way. Ego critically gets in the way and works against you. Instead, build a business case around commercial value, not system or platform hygiene.

2. Organise Around Business Outcomes: stop structuring data teams around capabilities (engineering, science, governance). I’ve been party to this too and I needed rearrange my ego on this too and start thinking that what matters most is structuring around value streams, you know those parts of the business that generate revenue, retain customers, or reduce real cost. Don’t get me wrong capabilities aren’t the enemy here, the enemy is the fact that you don’t focus on those business outcomes, but around the need to build castles in the sky. Stop that and stop it now, just as history shows us it will never amount to much, apart from a lot of sunken cash and revolving doors.

3. Push Ownership to the Front line: endless conversations about the wrong type of ownership have never made your business move forward, it’s only led to more confusion and frustration. Data as many of us have discussed previously needs to be embedded in the decision-making loop, not just available on some over designed, with umpteen amounts of metrics that make little impact to decision making on a dashboard. The key factor is that those on the front line are the folks that are making decisions and doing so daily, need to have access to data at the decision making trigger point, so give those sales, operations, product, and finance teams that ability so that they are using data instinctively and independently, not wait for endless reports, that are akin to a buffering cycle.

4. Measure Value, Not Activity: this is another flaw in the pursuit of some form of happiness. Moving away from the idea that you are not in the business of building pipelines or reports. Just like the musician isn’t in the business to play their instrument, o they are there to delight their listeners, create a fantastic sound that is associated with their unique style. You are not in the business to buy another tool, you are in the business of driving revenue, margin, efficiency, profitability, and customer satisfaction. Don’t measure the vanity, measure what matters.

5. Redesign the Operating Model: yes, of course I’m going to drop this on you. Did you think it was going to be overlooked? Nope. Why? Because this is the big one, the mountain that so many can’t be bothered to climb because it’s too difficult. Just leave me alone to build my pipelines and build a new platform or some visualisation that isn’t touched for months, years, decades. No, I’m not being flippant, I guarantee that many companies right now churning out dashboards for the last decade will find that less than 1% are being utilised. So, what now? You have the power, vision and control to build a new organisation structure. One that provides the relevant incentives, designs game changing processes, and the leadership mindset to support the re-imagining of the intelligent organisation. If you can’t do that then what you do will always just be a load of noise. You need a real operating model for data, not a patchwork of tools and teams.

The Hard Truth

If you’re still treating data like a discretionary line item, you know something you cut when times are tough, then your mindset is one that is a losing one. What are your competitors doing? They are building systems that learn, creating the platform for teams to move in clear signals, embedding operating models that adapt to real business needs, and they aren’t just sitting on a ton if richer data than you have, no sirree, they have worked out how to use it better and faster than you.

That is the hard truth and fundamental difference.

The future belongs to companies who invest in data as a fundamental business capability, not as a cost, but as the backbone of how they operate, compete, and grow.

The others?

Well, they will just keep tightening the budget, trimming the ambition, and wondering why transformation never seems to deliver. Being a statistic of those 80% failures.

That’s the trap, and if you don’t redesign your thinking, your operating model, you’re already in it.