A business has a data-driven culture when decisions are based on hard data, as opposed to on purely what decision makers think based on their accumulated experience. As someone that has worked with many companies to encourage a data-driven culture to take root, there are often common threads between them.
Companies that need the most help tend to have a number of senior people who have been successful in their industry for many years, are now in roles such as the head of sales or the head of marketing and are resistant to new ways of working because they have learned to make decisions quickly ‘based on their gut’. Judgment based on many years of experience remains valuable, but it needs to be continually validated against hard facts to check its enduring relevance in a world where rapid change is being driven by factors such as Covid, Brexit and digitisation. This is where a data-driven culture can help.
There are several big problems to be overcome. Firstly, decision makers need to realise that their thinking is out of date and that better decisions are possible. Once upon a time, senior sales managers were junior execs making hundreds of sales calls. From that, they may have worked out that if you ring between eight and half past nine in the morning, people are arriving in the office, so they are available and receptive. What they see as an intuitive choice may in fact be based on data. But it is data from fifteen years ago and is now woefully out of date.
The good news is that it is possible for companies to change. With the right messages from the very top of the company and investment in tools and training, most businesses can start to base their decisions on data. Here are the areas that most companies need to focus on to achieve this:
Data platform and trust
Getting a modern platform in place is crucial. If you have a slow, unreliable data platform, many of the benefits of making data-driven business decisions are simply unavailable to you. The choices here can be bewildering, but providing you choose one of the modern cloud-based providers, the choice of which company powers your data platform is probably less important than persuading your staff to use it properly.
That said, the system you put in place must be reliable and user-friendly enough to become invisible to the staff at your company. Old-fashioned systems frequently fail overnight, don’t load data reliably and don’t work when you need them most.
A replacement has to be able to provide a real-time view of the business instantly. Only with trust in the data and its reliability can you build a data-driven culture. If staff are constantly questioning the data’s validity or wondering if it will be there at all, data will not be part of decision-making in the way it should be.
Once the data is reliably available, it needs to be easy to understand and interpret. One of the most important things is establishing a data dictionary. This defines all the fields in a language that people in the business can understand. This is particularly important if you are expecting people to go and find out information for themselves, rather than relying on a central team to do it for them.
Data cataloguing tools help people understand exactly how each data element is defined, how it has been calculated and where it has come from. Visualisation tools can really help bring data alive, so it has more meaning for the people that need to interpret it. WhereScape, Tableau, Power BI, Looker and Alteryx are tools that we often use, but as each one has its pros and cons, it is important to discuss your needs with an expert so that the tools you choose fit what you are trying to achieve.
Some companies have good data-driven cultures by relying on a central team to produce reports, but we find that the most effective organisations tend to have a strong self-service culture when it comes to data. By democratising data, companies empower their employees to act in an agile manner, to try things out and change course as they go, rather than relying on large projects that stretch over months and years to drive change.
But how do you get people to find and analyse data when they have never done it before? Good training is an excellent way to start. We run many training courses that use Gestalt psychology to help people understand whether they are communicating effectively in the way they present data.
For example, we have worked with several police forces in the UK, including the Met police, to improve their data skills. One of the issues the people on our course were looking into was whether the presence of gambling shops on the high street was a predictor of crime. Beforehand, this would have been presented as a series of dry tables. Afterwards, they used a roulette wheel with 24 numbers on it to represent a clock, overlaid with crime levels at those times. This told a much more compelling story, especially to those who were less data-savvy.
Data driven businesses lead from the top
If the CEO and the company board emphasise the use of data to make decisions when communicating to employees, this will filter down through the organisation. If decisions appear random or fad-based, it won’t help instigate a data-driven culture.
We have also seen the use of live data transform board meetings from the old-fashioned approach where the CEO simplistically chats through a pre-determined set of issues to something much more useful. By having live information at their fingertips, and live dashboards set up to present the key information in a compelling way, board meetings become much more about making decisions on an informed basis rather than rubber-stamping something that has been worked on and agreed beforehand.
That lets the board members do their jobs better and enables them to perform advanced scenario planning. What would happen if the factory that makes most of the products burns down? What happens to all the retail estate a company owns if retail moves online? How will various 30-year trends affect the bottom line? All these questions and more can be answered with proper scenario planning, based on solid data.
Regular tips and reminders
Driving permanent change in an organisation is always difficult, making repetition important. Senior managers consistently highlighting why basing decisions on data is a good idea and rewarding those that do this will make a difference over time. So will initiatives such as a regular email highlighting tips and tricks to employ when analysing data.
A company could even set up a genius bar in the office, or a virtual meeting at the same time each week, staffed by people who are good at helping others find out the answers to their business problems using data.
Get help with a data driven culture
Red Olive has been helping companies extract value from the data they hold for over ten years. We are platform-agnostic, so are well placed to help companies make the right choices that will help transform the business into a data-driven operation. Not only can we build the infrastructure and train everyone on using it, but we can also be part of the cultural shift that is needed.
About Jefferson Lynch
Jefferson is the Managing Director of Red Olive. For over ten years, Red Olive has been unlocking the value of the data that organisations hold, finding and exploiting patterns to deliver increased revenues and reduced costs. Email [email protected] or call +44 203 745 9790 to find out how we can help your company modernise its approach to data today.