The Financial Services Agency (FSA) has published a draft revision to Japan’s Corporate Governance Code, while a book titled “Offensive Data Governance that Produces Results” has been introduced. At first glance, these two news items seem unrelated, but they actually strike at the same core issue. They represent a movement to reframe governance not merely as “regulatory compliance” or “risk management,” but as a “design technology” for generating business results.
Many owners and managers of small and medium-sized enterprises (SMEs) might imagine “data governance” as the introduction of some large-scale system (like a DWH or MDM) or the tedious, costly establishment of management regulations. However, that misses the point. What these news items suggest is a shift from “defensive governance” to “offensive governance.” This aligns perfectly with the philosophy advocated by this media outlet: “Governance is a higher-order management design concept.”
This article will explain concrete methods for organizational design and decision-making that allow SMEs to strategically leverage data and build a competitive advantage, intersecting the direction of the FSA’s code revision with the concept of “offensive data governance.”
From “Defense” to “Offense”: The Common Vector Indicated by Two News Items
First, let’s interpret these two news items from a governance perspective.
The first is the FSA’s draft revision of the Corporate Governance Code. Reports indicate that one focus of this revision is strengthening disclosures related to sustainability. This is not merely a regulatory enhancement saying, “Do your ESG reporting.” Behind it lies the recognition that for long-term corporate value creation, proper management and disclosure of non-financial information concerning environment, society, and governance (ESG) is essential, not just financial information. In other words, it’s a movement to elevate governance from “rule compliance for listed companies” to “information design for corporate value creation.”
The second is an article introducing the book “Offensive Data Governance that Produces Results.” The title is symbolic. Traditional data governance has almost always been discussed in the context of “defense”: “protecting data quality,” “ensuring security,” “safeguarding personal information.” However, this book prefaces its title with “produces results” and “offensive.” This signifies a repositioning of the purpose of data governance not as managing the data itself, but as leveraging data to achieve business outcomes.
The common thread running through these two is the philosophy of repositioning governance as a “means,” not an “end.” The FSA’s code suggests “governance as a means for corporate value creation,” while the data governance book suggests “data management as a means for generating business results.”
The Reality for SMEs: Data Exists, but Organizational Silos Prevent Its Use
So, what is the situation on the ground at many SMEs? Based on my experience supporting over 38 companies, a common pattern is as follows.
The sales department manages customer data in Excel, the manufacturing department has production records in a separate system. The accounting department aggregates data from accounting software after the closing date. Each dataset is hoarded as a “departmental asset,” with almost no horizontal collaboration. Management wants to “utilize data” but doesn’t know which data is reliable or who to ask. Ultimately, they remain unable to break free from decision-making reliant on “intuition and experience.”
The root cause of this state is not a technical problem (lack of systems) but an organizational problem. It is a state where “division of labor has become division.” Each department focuses on completing its own tasks, completely lacking the perspective of how the data generated in that process could be useful to other departments or management decisions. This is the biggest barrier to data being “unusable.”
The first thing “offensive data governance” should tackle is not the introduction of expensive systems, but the design that eliminates these organizational silos.
Reversing the Decision-Making Order: A Practical Approach to Data Governance
So, what should be done? Let’s apply the “proper order of judgment” advocated by this media outlet to data utilization.
- What business decision do you want to make? (e.g., We want to develop a sales channel for a new customer segment.)
- What data is needed for that decision? (e.g., Existing customer attribute data, website access logs, SNS engagement data.)
- Design the rules (governance) for collecting, integrating, and visualizing that data.
- Select and introduce the necessary technology (systems).
The mistake many companies make is that this order is completely reversed. The mindset of “Let’s introduce a DWH (data warehouse) first” or “Let’s get an MDM (master data management) tool” follows the order 4 → 3 → 2 → 1. This makes the system the subject, leaving the crucial “business decision we want to make” behind. As a result, an expensive system is implemented, but it becomes an unused “coffin.”
3 Concrete Actions to Implement “Offensive Data Governance”
Here are three concrete actions that SME owners and managers can start tomorrow.
1. Change the Agenda of “Decision-Making Meetings”: Clarify Data Requirements
In meetings about launching a new product or sales strategy, does the discussion often become “Which is better, Plan A or Plan B?” Add one question to that: “What kind of data would allow us to make this decision with greater confidence?”
This question works like magic. The sales manager might say, “I’d want regional sales data for similar past products.” The marketing person might answer, “It would help to have data on trends in competitors’ web advertising.” This is a data requirement starting from a “business decision.” Listing these requirements and examining whether they can be obtained and analyzed under the current setup is the first step in “offensive data governance.”
2. Appoint “Data Liaisons,” Not a “Data Officer”
When people think of data governance, they often imagine appointing a dedicated “Data Officer” (like a CDO). However, for SMEs, that is not realistic and can even be risky. Entrusting it to one specialist can recreate “silos,” leading to rules detached from departmental realities.
Instead, I propose appointing one “Data Liaison” from each department. This role has two missions: “to consider how data generated within their department can be used by other departments” and “to coordinate how their department can provide the data needed by other departments.” Hold a “Data Utilization Workshop” once a month where these liaisons gather to discuss how to realize the data requirements that emerged in the aforementioned “decision-making meetings.” This is a proper implementation of a “governance framework.”
3. Start with a Small Success: Co-develop a Single KPI Dashboard
Trying to integrate all company data at once is a recipe for failure. First, focus on one key KPI (Key Performance Indicator) that management and all department heads have a common interest in. For example, “lead time from order to delivery” or “average spend per new customer.”
The “Data Liaisons” map out which data in which department’s system (or Excel) is needed to calculate this KPI. Then, using existing tools (like Google Sheets or the free version of Power BI), create a dashboard that automatically aggregates this data every Monday morning and displays it in a simple graph. This “small success” lets people experience the value of using data cross-functionally and becomes the first solvent to dissolve organizational silos.
What the Governance Code Revision Asks of SMEs
The FSA’s Governance Code primarily targets listed companies. However, its philosophy applies to all businesses. That is, for sustainable growth, a mechanism (= governance) is needed to properly manage diverse management information—not just financial data—and make decisions based on it.
At the core of this “diverse management information” lies data. Customer data, business process data, employee satisfaction data, environmental impact data from the supply chain… Modern governance demands a design that not only “protects” this data but actively utilizes it for “offensive” management decisions.
SMEs have the potential strength to leverage data more nimbly than large corporations, even without extensive rulebooks or massive systems, by correcting the decision-making order and implementing simple designs that prevent organizational silos. Now is the time to recognize that the essence of data governance lies not in technology or regulations, but in how to design an organization that “uses” data.
(Reference Sources: Reports on the FSA’s Corporate Governance Code draft revision / Article introducing the book “Offensive Data Governance that Produces Results”)
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