Executives are uncertain about the future, and many are facing tough decisions about staff, profitability, and which investments are still worth making in a tough macroeconomic landscape.
I recently connected with Brett Hurt, co-founder and CEO of data.world, the data catalog company, to discuss his experience leading companies through recessions and his thoughts on how data availability, quality, and analysis can be the key differentiator for companies in an economic downturn.
Gary Drenik: You’ve led multiple companies through recessions, including the NASDAQ collapse in 01 and the doubling of unemployment during the Great Recession. What makes this recession environment different?
Brett Hurt: This is my third major recession as an entrepreneur, and every time it is different. The good news is this recession need not be as painful as the last two. The data and analytics capabilities that organizations now have access to provides a data-driven way to successfully adapt revenue and cost strategies to the realities of a changing economic environment. I know how powerful the impact of data can be from my own personal experience comparing how we weathered economic uncertainty in the early 2000s versus the Great Recession of 2008.
In the early 2000s, the massive influx of data was just beginning. Back then, I was leading Coremetrics, which provided advanced metrics to retailers online and was acquired by IBM. We knew that insights into browser-to-buyer conversion ratios and advertising-clickthrough-to-sales ratios would enable better customer experience, products, and profitability. Unfortunately, we were only just rolling out our product when the bubble burst.
By the time the Great Recession started in 2008, when I was leading Bazaarvoice, tech leaders were finally starting to harness some of the power of the data available to them. The reality in both cases was executives really didn’t have the know-how or tools to use data – at its core, the facts of their businesses – to their fullest potential. Data was not nearly as high quality as it is today and the software to analyze it was not fully integrated into businesses or trusted by executives yet. This time can and should be different.
Drenik: How do leaders actually put that data to work for them during a recession?
Hurt: For executives, recessions usually mean a lot of tough decisions that can make or break their business. If you’re the person tasked with deciding whether a team needs to be downsized, for example, you want to make as educated a decision as possible based on the facts and solid analysis. Today, leaders have the benefit of up-to-the-minute data and far, far more detailed insights into their business and the world around them.
Data catalogs organize data not only for the executive but for the entire enterprise, enabling a deeper level of alignment on decision-making across the organization. They also increase data team productivity by speeding data discovery, automating governance, and improving communication between data engineers and data analysts. In a downturn, data catalogs organize teams for efficient and productive data-driven decisions.
Drenik: What’s the risk of not investing in and utilizing data now?
Hurt: Keep in mind that data are the facts about your business and to be in command of your facts when facing economic headwinds is imperative. We know that more data analyzed more deeply means better decisions. Not recognizing data as a key tool in the corporate toolbox could mean letting more staff go than necessary, prioritizing the wrong teams, or investing in initiatives that aren’t going to pay off in the long run. There’s also a tight window for business leaders to pull this off, because if you haven’t invested in your data initiatives already and you’re debating it right now, you may invest too late and not reap the benefits to their fullest extent.
Drenik: What’s your advice to fellow CEOs on preventing data and knowledge loss when layoffs are inevitable?
Hurt: Hopefully, the market is stabilizing, and the availability and quality of data will make fewer layoffs necessary. That said, according to a recent Prosper Insights & Analytics survey, 40% of American adults think there will be more layoffs over the next six months. When layoffs are necessary, trust in your data to inform decision-making is a major asset.
Drenik: Are there any long-term benefits too? When the economy turns around, what happens then?
Hurt: With over 75% of Americans feeling uncertain about the economy or believing that it is on the wrong track according to that same Prosper Insights & Analytics survey, thinking beyond the recession is difficult for most people right now. However, as you’re suggesting, there are long-term benefits of making these investments in data now. The same features that prevent knowledge loss and transfer ownership of data during a recession can be used to accelerate out – powering faster onboarding and confident decision making.
Plus, with the excitement around generative AI and its integration into businesses across the industry spectrum, investing in your data is a foundational initiative. We’ve all heard about AI hallucinations due to faulty data, and that’s a great anecdotal example of what’s at risk when you don’t invest in your data – and what’s possible when you do. AI integrations are only as good as the data they are trained on or have access to. So, if you’re thinking about upping your AI game, ensuring your data foundation is strong should be a critical part of that thought process too.
With our clients, we use our new AI Lab to explore how generative AI can work for them and their data catalog to meet their business goals. Through collaboration in the Lab, we saw a need from our clients for autogenerated metadata. Not only were they looking to boost efficiency for their data stewards, but they also understood the importance of metadata for maintaining their data quality. With that in mind, our Archie Bots were born. By integrating Archie Bots into their data catalogs, companies can auto-generate metadata instantaneously and, as a result, be confident that their catalog is constantly updated and accurately informing decisions that make surviving a recession much less difficult.
Drenik: Thanks, Brett, for your insights on how data can set companies apart during this economic tumult.
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