We have all heard it. “We are a data-driven company.” “We use data to make better decisions.” “We are a data-first organization.” Most organizations fully embrace the potential of data. We have been building data warehouses, establishing reporting platforms, and using data in some manner for years. We are accumulating exponential volumes of data as most every process, system, or application is collecting data. This is all good, but just because we have data, are we truly using the data? And more so, is it at the center of our daily activities?
The reality is that most organizations have very siloed data. These many processes, systems and applications have collected vast amounts of data that may or may not sit in the data warehouse and, in some cases, are not connected. We also most likely have reports or dashboards at our disposal that we know are being updated, but we may not be using them. We are using descriptive data (or data that describes a business event) that is a month old. We are not sure how to build meaningful insights or actions from the data. We often come to a meeting with limited data or a lack of confidence in the numbers. Small and large organizations alike have some basic levels of data maturity but are not fully reaching the potential of being “data-driven.”
“Without data, you’re just another person with an opinion.”
– Edward Demming, Statistician and Management Consultant
Simply having data is not the same as being a data-driven organization. A data-driven organization is using the data specifically to identify, implement and test new business activities. We are not using our opinions and ideas to implement transformation—we are relying on the data to help guide, shape and adjust.
Attributes of a data-driven culture
As an organization improves its data maturity and data literacy, the ability to use data to create insights will improve. A more mature data-driven culture will see some very specific behaviors.
– Data will be referenced frequently. Key KPIs and metrics will be referenced frequently across all levels of the organization. It will be clear as to the metrics that a group (regardless of size or function) is using.
– Meeting behavior will change. Meetings will start with metrics and insights. People will defend their opinions with data. Critical thinking and discussion will be around the interpretation of the data.
– Data literacy will improve. All levels of the organization will start to understand and see the shift in data insight use and development.
– Dedicated data and insight teams/individuals will arise. While the “tide will rise” and workforce will start to use data, organizations will make more dedicated investments on individuals with more advanced analytical and/or data skills. The role of data analysts and data scientists will grow.
– Insights are referenced. There is a big difference between data and insights. Data is the outcome of the actual collection of an activity or event. An insight is the identification of a business application from the data to drive a meaningful result. The data is only good if it is being used to drive a new activity or adjustment.
– Leadership is frequently asking/questioning the data. An organization that is data-driven will have leaders that are asking for the data to support a decision. This is a key tool to holding the organization and individuals responsible for making data an integral part of the culture.
Evaluating your data-driven culture
It is important to take a hard look at ourselves to see how we can continue to enhance our data maturity and data literacy. If we can truly become data-driven, we will greatly improve our agility. We can make quicker, more accurate decisions. We can quickly test new ideas and approaches. We can explore new business models. We can adapt to new trends. The allure of a data-driven culture is significant.
We have five simple questions to help you reflect on how you are using data and identify where you need to start making some changes.
1Can we measure the activities we feel are important?
Measurement of activities is the key to insight development. You are probably collecting data, but is that data helping you measure success or failure? Rapid measurement of activities is a common challenge with organizations.
2Are we making decisions tied to data?
On the surface, this question is easy but really think about how decisions are made at various levels of your organization. Is your individual team leader making decisions based on data?
3Are we specifically asking our teams about the data?
Data and insight use begins at all leadership levels – not just at the high levels.
4Are we investing in data insights?
Most organizations are investing in data at some level but is there an investment in taking the data and analytics and driving meaningful insights and actions?
5Are we educating our teams on how we define a data-driven culture?
This is a big one. I recently was working with a client who had an employee comment negatively about “using numbers” to evaluate activities. The client used the opportunity to educate on how the volume of data allowed them to more intelligently approach the problem and the importance of using all information to make good decisions.