“It is a capital mistake to theorize before one has data.” ~ Sherlock Holmes in ‘A study in Scarlet’ by Arthur Conan Doyle
The world’s greatest detective, albeit fictional, had an important lesson to teach all of us and today’s modern, progressive businesses. Ideas or theories without data are just assumptions with no factual reality to back them up. If you genuinely want to understand the market you operate in and capitalize on the opportunity it offers, you need data!
However, just having access to data is certainly not enough. You need the right tools, the people, and the mindset across the organization to extract the most out of the available data. All of this clubbed into one concept boils down to creating a ‘data-driven culture’ within the organization.
What is a data-driven culture?
An organization can reap the benefits of a data-driven culture when all its members are aware of the driver metrics they are responsible for and how they contribute to the bigger picture by moving the Key Performance Indicators, or KPIs.
Such data democratization or simply the accessibility of information to the average user begins right at the top and then trickles down to the rest of the organization. The employees need the appropriate awareness, training, tools, and most importantly, incentives to hop on the ‘data-driven decision-making’ bandwagon.
A more straightforward way to explain this is - you would be encouraged to make all your decisions based on data if your leader practices the same ideology, your leader will practice such ideology if their leader practices the same, and so on and so forth.
Key advantages of fostering a data-driven culture
This could be a never-ending list as we are still unaware of how to fathom the potential of the data that we possess entirely. But let’s look at a few fundamental points that help us establish a good enough ground to start implementing such a culture right away.
1. It establishes an inherent faith in the decision-making process. Whether you are deciding to launch a new product, adopt a new promotional strategy, or venture into a new market, having some sort of insights from the relevant data points lends you more confidence to go ahead and implement your plans. More often than not, the faith in your vision, strategy, and the team encourages the entire organization to fully commit to the idea, which is a necessary ingredient for success.
2. It helps you shift from a reactionary approach to a proactive one. While the few initial data-driven decisions you might take could be in response to a particular event, such as the success of a new product variant introduced by a competitor. But, over time, your organization would learn how to leverage data to stay one step ahead and grab the business opportunities before anyone else does.
3. It can save and make you a ton of money in the long run. This is rather the simplest yet the most crucial advantage of fostering a data-driven culture within your organization. Richard Joyce, a Senior Analyst at Forrester, stated, “For a typical Fortune 1000 company, just a 10% increase in data accessibility will result in more than $65 million additional net income.”
Data-driven culture in action
From adapting to transforming consumer preferences to bringing new innovative products to the market, companies are increasingly relying on data to make game-changing decisions. Let’s look at a few examples of how such a change in approach towards data has led to profitable outcomes.
1. Google harnessed the power of data to create a better workplace for its members. Richard Branson once said, “If you take care of your employees, they will take care of the clients.” Taking inspiration from this principle, Google created ‘Project Oxygen’ and mined more than 10,000 performance reviews to identify common behaviors of high-performing managers. This then resulted in comprehensive training programs that ultimately boosted median favorability scores for managers from 83 percent to 88 percent.
2. Uber uses a ton of historical and real-time data to bridge the demand-supply gap. It takes a monumental effort to ensure that you always have access to a cab at your fingertips. A decade ago, the simple process of booking an affordable cab to get from point A to point B was a luxury unheard of. Within the last few years, Uber and similar companies worldwide have amassed an enormous amount of data that helps them predict demand and guide their drivers to be at the right place at the right time.
3. Starbucks optimized its real estate decisions based on extensive data. Hundreds of Starbucks locations had to be shut in 2008, which is when the company decided to take a much more analytical approach to place their stores. They now use data points like population density, average incomes, and traffic patterns to identify potential locations for a new store. As a result, Starbucks could estimate a store’s profitability and decide whether a new store will be economically viable.
Pillars of a data-driven culture
A data-driven culture cannot be purchased or manufactured. There is no shortcut to achieving this feat. It must be nurtured and developed over time, which requires a more holistic approach instead of just investing in a few tools or training programs.
Transforming the Mindset
The primary challenge for any organization is to bring about a fundamental shift in how its members think of data. The leadership must diligently and patiently steer their teams toward this new direction. Leading by example is one of the most powerful methods for building any kind of culture.
Another trick that could be extremely useful in this circumstance is generating a few quick wins. When people see the immediate results and witness the tangible benefits of using data, they would automatically be convinced to alter their approach.
Consistent experimentation with novel ideas is also vital, particularly during the initial phase. It helps you establish a foundation of the kind of culture that fits your organization and delivers the results you expect.
Building the Skills
Your employees need specific skills to gather and analyze data adequately and ultimately make the most of it. Providing basic training to all your employees to help them understand how to read and deduce insights from the data is non-negotiable.
Moreover, beyond the basic data literacy, they would need to develop and practice methods for communicating the data in a way that translates into actionable business insights. Hiring data experts and data engineers is a given in this process. But, an organization must also invest in data trainers and coaches who can help drive a data-savvy attitude across the workforce.
Getting the Tools
Short Answer: Datalogz has got you completely covered for this one!
Long Answer: Every organization experiments with a bunch of tools and software that uniquely fit the needs of the employees and the business as a whole. Establishing a robust technological foundation is a vital aspect of the data-driven culture in the long run.
You need a mechanism that you can trust. An efficient data management, data governance, and data security setup will deliver enormous returns when its long-term benefits are pegged against its initial cost. It should make everyone’s job easier instead of the constant troubles many organizations face today due to their ineffective data systems.
Deploying Data as an Asset
An asset is something that provides a current or future potential economic benefit. Data could prove to be the most valuable asset an organization possesses in the correct form and at the right time. However, it is an asset that will gradually build in value over time.
You need to protect and maintain data quality to ensure it stays relevant and valuable for years to come. Data privacy and data security are two other essential functions to help your organization achieve its full data potential.
Developing a data-driven culture at your organization will require consistent effort, and indeed, people will continue to be the most challenging aspect of the change. However, success in implementing this would reward you handsomely in the future.
Ready to transform your organization into a data-driven powerhouse? Get in touch with us to understand how Datalogz can help you in your mission.