In the upcoming book, Data Partnership Strategy, the Ward brothers tackle the best way to create a comprehensive data strategy that positions companies for success with their data assets.
In episode 5 of “Are You DataSmart?” the Wards break down the initial starting points for every business when building their data partnership strategy. The ability to identify available data to any business across internal and external data sources is the first critical step in the DataSmart Method.
Jay: “Are You DataSmart?” A weekly podcast on data security, information management, and all things related to the data you have, how to protect it, and maximize its value. I’m Jay Ward.
Christian: And I’m Christian Ward. And today we’re going to open on our discussions around data partnership strategies. In our upcoming book, Jay and I break down a method that’s worked for he and I really for the past 30 years in building comprehensive data strategies and data partnership strategies and it all centers around this concept of “identify, value, structure, and protect” your data assets.
Jay: It’s interesting but we kind of came to this same approach from different angles. Christian, you have the creative bring it together, business-oriented, let’s come up with these ideas to create partnerships and I have the, let’s say, creative destruction as a litigator. You approach these relationships when they’ve completely fallen apart and you’re trying to help your clients salvage whatever they can from the relationship. And in that sort of prospective and retrospective approach, we sort of met in the middle about the best way to think about these relationships, to maximize their value, to give you want we can out of them, but also how to protect yourself against some of the common flaws, the common reasons why things go south.
Christian: Absolutely. And it’s been helpful. I obviously over the years it’s interesting to see how much of the business world has embraced the data and now it’s lifeblood, it’s what every company builds upon, that’s how they value assets, that’s how they value their relationships with their customers, and, you know, looking at it we always try to break this down as sort of the simple buckets of knowledge and understanding. There’s really only three types of data partnership most businesses have to worry about. There’s the one where you give data, there’s the one where you take data, and there’s the occasional give and take data partnership.
And from our point of view, having a comprehensive data partnership strategy in place is really critical to being able to jump on those opportunities to participate in any one of those three as quickly as possible. And I always like to explain to people, you know, if you’re not sure of a give and take data partnership strategy, we’ll just have you look at your phone and every free app on your phone, every free app is a highly disclosed covered by lots of terms and disclaimers as to what they can do with the data that you provide, but every free weather app that tells you whether or not to bring your umbrella that day is literally sharing your information with thousands of other businesses of where you are, where you live, where you sleep because those apps always have your location services on. So there isn’t really any such thing as a free app. There’s only…
Jay: And even Candy Crush?
Christian: No. Candy Crush, yeah, no, definitely not. Candy Crush actually gathers quite a bit of data, especially probably about how much time you don’t spend doing what you should be doing at your job. But ultimately, all of that information is made available to then create data partnerships or monetize those data assets which is a big part of data strategy.
Jay: I think it’s interesting to talk about what this data does and how you can use it to create relationships. I think the first part, Christian, that you and I have talked about in this framework is where do you start. Like, if you want to build a relationship, you know, where do you start. And I think the question might be, why do you want to do that and where do you go from step one.
Christian: Well, it’s always the question that whenever I advise companies on what their data strategy should be, we always start with a whole concept of “know thyself which, you know, ultimately sounds really simple but in data assets, it takes quite a bit of time. And the reason why it does is there’s really two types of data assets for a business. And the first one starts with their internal data assets. Internal data assets are data assets or datasets that exist literally only because your business is in business, meaning your financials, your transactions, your interaction with your customers, your newsletter subscribers. The content you create itself.
All of those things would not exist if your business didn’t. And this literally boils down all the way to even like a local deli which I know people wouldn’t think is necessarily a huge data opportunity, but it is. You string together what turkey products, what breads, what chips are selling more at lunch given a given season and you take that transactional data that only exist because the deli exist. Or if you roll that up across 3,000 delis across a geography you can really start to get a sense of whether or not, let’s say, gluten-free products you’re taking off. So there are all these great examples of data that only exists because it was created internally by our business.
Jay: Yeah. It’s interesting because you say, “Know thyself” or “Temet nosce” as we lawyers would say because that’s all we ever really did was learn how to use Latin phrases to make us sound smart. But it’s one of the hardest things to do but one of the harder things is to know your partner. And that’s the perspective, I think that a litigator has. You know, you didn’t know really who you were dealing with when you got into this relationship. So if you’re not thinking about who’s going to see your internal data and what they’re going to do with it, you’re opening yourself up for a risk. Because having an iron clad contract about what they can do with the information you give them is one thing. But having an iron clad contract along with an understanding of who they are and what they might do, that’s even more valuable. So you need to do your diligence when you’re thinking about getting into a relationship, even if you’re just talking about, you know, sharing some of your information. You have to be careful and thoughtful about what you’re giving and why.
You know, there’s another aspect to this that’s important because the business that you generate by being in business is not just about you, right? It is also about your customers, your clients, the people that you’re providing services for. If you’re providing services and collecting data on European citizens, for instance, you have to be careful about what information you share with third parties because the GDPR, we keep coming back to it, but even if you’re just selling data about which schnitzel is selling on what day in Berlin you’re still creating a rim of data about European citizens. And if you’re sharing that, you’re creating a controller, processor relationship and that comes with a lot of responsibility under the GDPR, so you need to know, flesh out and get in writing what your obligations are when you’re sharing that information.
Christian: And it kind of brings us to the next style of data, right? So as you said, if you’re storing data internally, that often is a direct dialog between you and your customer base, so it’s critical to know who is using that data and how. But then there’s external data assets. So we’ve talked a little bit about internal data assets and identifying them, but then there’s external data assets and this is actually much harder. External data assets are all the data that’s created about or around your business. So it’s things like reviews about your business, so if someone buys, you know, the gluten-free bread and has a reaction and they post all over the internet that you had mislabeled this bread or something of that nature, that has both your internal information sort of mapped into external creative data. So it’s things like user-generated content, people posting photos about your events or your business, things like your financials.
So when you’re financials are allowed for investors to see them, that data is now external but there are all sorts of data that then glum’s onto that. Think of all the analyst reports or financial reporting analyst that make recommendations on stocks or public companies, that amount of content, that additional content attaches to your business. And in some cases, you can access that, you can leverage that to build more information and build additional datasets. It depends on what your rights are to that data. But in many cases, you have the options to use both if you can pull together the connection between the external and the internal. But I think, Jay, a lot of your points on knowing where, who that data is from, and what rights you have to use it is a critical part of that audit process.
Jay: Right. You don’t want to land yourself in trouble inadvertently. I mean, you also don’t want to walk into trouble intentionally, but at least you could be forgiven for having a plan in time. But landing yourself in trouble because you didn’t think about what you were doing or why that’s the worst-case scenario. So what you need to do is be thoughtful about when you’re doing this audit, how can you use your information when you’re, you know, you’re auditing your data, you’re thinking about what you have and what you’re using. Think about how you’ll use that to build out your data security compliance protocols, how you’ll use it to make it easier to follow through on your privacy policies. So I’ve gone through audits with my clients before of all of their assets and, you know, they always start the same. The client says something like, “I don’t have all that much,” you know, not very much and then I’ll sit down and ask them 10 questions and they say, “We’re gonna have to reconvene in a week or two so we can get back to you.”
It’s invariable. It’s always like, “Oh, wow, I didn’t even think about all the internet. I forgot about the internet.”
So what you want to do is go through these audits and use them as a learning exercise to help you because going into a partnership with the knowledge of everything you have, that is the critical component of the DataSmart strategy, and that’s what we advise our clients to do.
Christian: So, again, on this sort of brief podcast where our plan is we’ll cover more aspects and chapters of the book in the upcoming podcast, but our focus on this one again is just as an introduction. The most important thing is to understand what you’re trying to get out of these partnerships, why they have a comprehensive data strategy, and importantly, how to identify and think about internal datasets and external datasets. Eventually, that can help set you up for a success on how to then build additional data what quite frankly that we call metadata or data about data which we’re gonna cover in an upcoming podcast.
Jay: And that’s in Greek, so again, you know I’ll be chiming again. We promise the book will not be in Latin.
Christian: Excellent. Well, thank you, everyone, for listening to this episode of “Are You DataSmart?”
Jay: Thanks a lot.