Could Data Have Saved Groupon’s CEO?

Although not totally surprising, it was disappointing to learn about Andrew Mason’s firing last week as CEO of Groupon, a company that Andrew founded over 4 years ago and grew to a publically traded company valued at $13B at the time of its IPO in 2011.  As this episode demonstrates, the C-Suite deals with the constant pressures of running their organizations – customer alignment, new product and services, market demand, innovation, cost containment and risk to just name a few. To successfully deal with these daily issues and ensure C-Suite sustainability, these leaders must be able to make informed decisions in a quick and timely manner.

In the March 2013 Harvard Business Review article Long CEO Tenure Can Hurt Performance, the research found that “CEO tenure affects performance through its impact on two groups of stakeholders—employees and customers—and has different effects on each. The longer a CEO serves, the more the firm-employee dynamic improves. But an extended term strengthens customer ties only for a time, after which the relationship weakens and the company’s performance diminishes, no matter how united and committed the workforce is.”

In Andrew Mason’s public farewell letter to his Groupon employees, the following caught my attention:

“If there’s one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness – don’t waste the opportunity!”

Is he implying that a CEO might not have access to the right data? The C-Suite doesn’t have a full complimentary set of data to make key decisions? Organizations aren’t being innovative enough to take advantage of various data sources to make informed, fact-based decisions?

Customer decisions are being made on a daily if not an hourly basis. The need for fact-based, analytics-driven decision making is becoming more critical for an organization. Companies that consistently outperform and drive customer share have made analytics and a data-driven business central to their strategy. A customer-centric data analytics program will support the CEO strategies towards customer segmentation, acquisition and retention strategies. A data analytics program will support the CEO’s intuition on operational process improvements to strengthen the overall customer experience.

With the hype of Big Data in the market, it is apparent that there is exponentially more customer data available in terms of sources, variety and volume. Along with the “traditional” customer data, forms of semi-structured customer data including call center, social media, web traffic, supplier vendor, competitor, market demographic and transactional data allows an organization to make fact-based customer decisions. The organizational challenge is the ability to capture these various sources of data and apply the right analytics to the customer data to gain new and meaningful insights.  It is even more imperative that a company has the structure and governance of their information management program to enable the customer insights. This means that the right data is accessible at the right time.

The HBR article notes that a new executive seeks information in various ways, tapping into both internal and external data sources in order to deepen both their customer and employee relationships.  As CEOs continue in their leadership tenure, they gravitate to relying on their existing, internal sources of information which makes them less responsive to customer trends and behaviors.

Intuition is that special characteristic of a great corporate leader.  That intuition drives strategy, programs and products; it is usually directionally correct.  Access to the right data at the right time only strengthens one’s intuition and keeps the corporate leaders focused on the customer.

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