Becoming a Data-Driven Organization

Are you data-driven? These days, companies are thriving because of DATA!

Becoming a data-driven organization is a frequent goal included within the pages of businesses’ strategy plans—and for good reason. Data brings critical insights that organizations can use to make strategic decisions and position themselves more effectively in the market. However, the transition to becoming an organization guided by data can be challenging and requires top-down support.

Being led by data also transforms the way companies approach business. The results of data-driven analysis can challenge established strategies, requiring teams to take a critical look at their practices in the light of new data. Another challenge faced when making this transition is having the wrong expectations for data, such as believing it will fix all business issues. Data is a tool requiring in-depth analysis and understanding before it can be used in the creation of a plan with actionable steps. It is not, by itself, a cure-all for business-related problems.

Despite these challenges, numerous advantages come with becoming an organization driven by data. It can show that saying “no” or “not now” can be beneficial to the company’s strategy and bottom line. It also has the ability to eliminate human bias that is present in the business environment. Companies are a collection of diverse people, all of whom bring with them their own unique experiences and perspectives, which is an asset to the company. However, when biases are apparent, they can hinder collaboration, delay decision-making, and interfere with the overall growth of the company. Data can filter through this noise and provide transparency and direction.

What to keep in mind when becoming data-driven

Here are four other considerations to keep in mind while working toward becoming a data-driven organization.

1. Understanding what “data-driven” means can help you and your company create a solid foundation for moving forward. While there are many ways to look at it, data-driven can mean that the organization’s processes are created from data and decisions are made based on data’s findings.
   
   My tip: Before making a significant transition like the move to focus on data across the organization, define what “data-driven” means to you in your company’s environment and ensure there is agreement across teams. This will ensure you all are working collectively toward the same goals.
   
   
2. No effective action can take place unless you understand what business problem you are working to solve along with the key metrics that need to be captured to make an informed decision. Analyze the company’s annual strategy plan, sales and marketing funnel, and customer segments to learn how data may help. Take time to learn the ins and outs of your organization by talking to internal teams and leaders and becoming familiar with your customers, including their pain points that are relevant to your product or services.
   
   My tip: Do not underestimate the benefit of knowing all aspects of your organization and the goals that are trying to be met. Even if you are not in a senior leadership role, the work you do will require you to track certain metrics. Knowing your own goals—in addition to the company’s ones—can help you improve your work output.
   
   
3. Data-driven organizations can quickly adapt to changes in their environment—if they are able to track and monitor the right set of data points. There is a plethora of data available, and the ones selected should align with the company’s and team’s short- and long-term goals. Focus on actionable data points that provide direction and insights.
   
   My tip: Astute leaders and managers recognize that this transition is a long-term strategy that should not be rushed and prioritize a few key metrics at first. Do not get overwhelmed with multiple data points too quickly. Additionally, focus on finding a data collection process that works for you, such as which tools to use, how frequently data will be collected and analyzed, and how data will be presented. Don’t fall prey to the paradox of choice with thousands of Key Performance Indicators (KPIs) that “have to be” prioritized.
   
   
4. Investing in data analytics tools can be invaluable in analyzing and categorizing large datasets. Some of these tools can also automate reports, bringing all of your KPIs together without the hassle of manually pulling data reports.
   
   My tip: Social media is an often-overlooked tool that can be leveraged to learn more about your consumers and their interests, goals, and intentions—all critical insights that can help companies better align their products and services in the market. This strategy is also a good reminder to deliver value to your consumers first instead of selling. Selling will happen naturally.

Making the shift to a data-first culture requires support from leadership, and the benefits are well worth the effort. Data not only streamlines your business and breaks down the barriers between teams but creates transparency across the organization.