069 - The Role of Creativity and Product Thinking in Data Monetization with ‘Infonomics’ Author Doug Laney
Doug Laney is the preeminent expert in the field of infonomics — and it’s not just because he literally wrote the book on it. As the Data & Analytics Strategy Innovation Fellow at consulting firm West Monroe, Doug helps businesses use infonomics to measure the economic value of their data and monetize it. He also is a visiting professor at the University of Illinois at Urbana-Champaign where he teaches classes on analytics and infonomics. On this episode of Experiencing Data, Doug and I talk about his book Infonomics, the many different ways that businesses can monetize data, the role of creativity and product management in producing innovative data products, and the ever-evolving role of the Chief Data Officer. In our chat, we covered: Why Doug's book Infonomics argues that measuring data for its value potential is key to effectively managing and monetizing it. (2:21) A 'regenerative asset': Innovative methods for deploying and monetizing data — and the differences between direct, indirect, and inverted data monetization. (5:10) The responsibilities of a Chief Data Officer (CDO) — and how taking a product management approach to data can generate additional value. (13:28) Why Doug believes that a 'lack of vision and leadership' is partly behind organizational hesitancy of data monetization efforts. (17:10) ‘A pretty unique skill’: The importance of bringing in people with experience creating and marketing data products when monetizing data. (19:10) Insurance and torrenting: Creative ways companies have leveraged their data to generate additional value. (24:27) Ethical data monetization: Why Doug believes consumers must receive a benefit when organizations leverage their data for profit. (27:14) The data monetization workshops Doug runs for businesses looking to generate new value streams from its data. (29:42) Quotes from Today’s Episode “Many organizations [endure] a vicious cycle of not measuring [their data], and therefore not managing, and therefore not monetizing their data as well as they can. The idea behind my book Infonomics is, flip that. I’ll just start with measuring your data, understanding what you have, its quality characteristics, and its value potential. But vision is important as well, and so that’s where we start with monetization, and thinking more broadly about the ways to generate measurable economic benefits from data.” - Doug (4:13) “A lot of people will compare data to oil and say that ‘Data is the new oil.’ But you can only use a drop of oil one way at a time. When you consume a drop of oil, it creates heat and energy and pollution, and when you use a drop of oil, it doesn’t generate more oil. Data is very different. It has unique economic qualities that economists would call a non-rivalrous, non-depleting, and regenerative asset.” - Doug (7:52) “The Chief Data Officer (CDO) role has come on strong in organizations that really want to manage their data as an actual asset, ensure that it is accounted for as generating value and is being managed and controlled effectively. Most CDOs play both offense and defense in controlling and governing data on one side and in enabling it on the other side to drive more business value.”- Doug (14:17) “The more successful teams that I read about and I see tend to be of a mixed skill set, they’re cross-functional; there’s a space for creativity and learning, there’s a concept of experimentation that’s happening there.” - Brian (19:10) “Companies that become more data-driven have a market-to-book value that’s nearly two times higher than the market average. And companies that make the bulk of their revenue by selling data products or derivative data have a market-to-book value that’s nearly three times the market average. So, there's a really compelling reason to do this. It’s just that not a lot of executives are really comfortable with it. Data continues to be something that’s really amorphous and they don’t really have their heads arou