4 Principles to Inspire a Truly Data-Driven Culture

Career AdviceWorking Life

You need to start giving your data the attention it deserves.

A data-driven culture is something that all forward-looking companies desire, yet it remains frustratingly out of reach.

Businesses today have access to more data than ever before, and this data can be used to inform every decision they make. Nevertheless, even the most data-literate companies are using only a fraction of that valuable context.

In a recent webinar, 451 Research's research vice president Matt Aslett explained that the average company uses less than half of its data available for analytics, but that utilization is predicted to double in the next two years.

With a wealth of data being neglected, companies are left to make decisions based on intuition or a partial view of their data. Creating a culture that relies on data instead of assumptions can help companies accelerate their journey.

By adopting these four principles, a company can prevent value locked in data from being wasted, and begin to build a culture that relies on data-driven decisions.

LEAD WITH THE FACTS AND OTHERS WILL FOLLOW

It is easy to talk about using data to inform decisions, but it is much harder to make this an instinctive approach to every decision.

Creating a data-driven culture means that leaders must show that data underlies all decisions, from product design to marketing campaigns to hiring and performance.

In practice, this manifests in both small and large ways. For example, managers can reinforce this expectation by constantly asking questions in meetings about the analysis behind recommendations. In internal communications, companies should promote and showcase teams that make decisions using analytics. When given statistically rigorous analysis, leaders should avoid reverting back to gut feelings and instead be bold and decisive.

ADOPT TOOLS THAT INSPIRE THE DAILY USE OF DATA

It's not that companies don't want to base decisions on data. They just don't have the right tools to access, analyze and act on all of their data in real time.

Cloud-native data warehouses have increased data storage capacity for companies, but existing business intelligence tools are not equipped to make use of this data.

Data teams have been forced to spend countless hours trying to aggregate, simplify, and streamline complex data sets into more manageable views. However, this process is often compared to downsampling an audio file — meaning a lot of important information is lost in the process. Consequently, decision-making suffers as a result.

These new analytics tools are designed to handle large data sets and help you find the information you need. With new platforms, teams can more easily use data in a daily, operational cadence by leading with what matters most — the KPIs that define performance — and automating the process of exploring the data.

Don't just diagnose the problem, find the root cause

Most organizations have dozens of reports, dashboards, and visualizations that detail the "what" in their metrics - what metrics are changing, when the change happened, and how large that change is.

The problem is that "what" doesn't inform what's next, and for every "what" we can answer, there are countless questions about "why" the change happened in the first place. These are the most valuable questions a leader can ask.

The main issue is that responding to the direct "why" question involves examining thousands, if not millions, of potential hypotheses, starting hours of data collection, exploration, and hypothesis testing. And when time is limited and the team needs answers immediately, there is no way to check every possibility.

Proactive analytics platforms are emerging to accelerate root-cause analysis and anomaly detection.

By accelerating diagnosis and focusing team attention on the highest-impact drivers of change with timely, relevant findings and recommendations for new questions to ask of data, these platforms improve success rates. Picking a platform that works well within your existing decision-making process is essential for successful use of these platforms.

EMBED ANALYSTS IN THE BUSINESS TO ACCELERATE UNDERSTANDING

The ability to quickly diagnose changes in data and recommend clear actions is essential to the success of a data-driven culture.

The amount of data being collected is growing faster than the questions that decision-makers are asking. The quickest way to close this gap and speed up decision-making is to ensure that the analysts in your organization are not only embedded in each business unit but are also actively involved in the team's activities. If analysts are not involved in the daily and weekly decision-making process, it will fail.

It is also crucial to invest in tools that will amplify an analyst's existing skills such as speed, interpretation, and storytelling. By taking this action, they will be able to have a wider impact on the business, look at more data on a regular basis, and contribute to more operational choices. With improved diagnostic platforms, these analysts can speedily answer more questions in a shorter timeframe and catch up with the influx of data into the business.

Analysts should be involved in the decision-making process to speed up data exploration. If stakeholders across the organization begin thinking in this way, it will rapidly reinforce the cultural norms of asking more effective questions and making decisions with data.

Your company can only reach its full potential with a data-driven culture. Data-driven cultures are not created by accident, but through continuous and consistent intention and habit.