Organizations want to maximize the value of their data by using it to make business decisions. When organizations shape their management approach to use data every day to make decisions, they are often described as operating a data-driven culture.
Market forces pressure businesses to adopt a data-driven culture
A decade ago, data was interesting, useful maybe, but not always business-critical. There were ways around the problem of not sharing data. Executives could always drag someone into an office and interrogate them for answers to their questions, marketers could run forums and research projects and count on a reasonable number of willing customers or prospects to take part, salespeople could still pick up the phone and cold call their prospects.
Not today. The tempo of business changed when things went online. As eCommerce has grown, data volumes have exploded. With the introduction of 5G, we are experiencing a hundred-fold increase in download speeds which means that it’s comfortably possible for me to operate a Chromebook connected to a cloud-based repository without housing all of the apps and files I need on a hard disk. In a world with so much data, moving at light speed is it any wonder that companies can no longer envision their managers crunching data on spreadsheets and thinking that it’s good enough? Conversations have moved towards data literacy and how to establish behavioral norms that install data analysis as a precursor to every decision.
The growing importance of data-driven cultures
Data has moved to the heart of boardroom discussions around how to achieve a competitive advantage. The latest research from Gartner suggests that, by 2023, data literacy will become an explicit and necessary driver of business value, demonstrated by its formal inclusion in over 80% of data and analytics strategies and change management programs.
The democratization of data analysis
Data has become the lifeblood of the enterprise. Executive management teams are taking more of an active ownership role in BI initiatives than ever before. Once the bastion of large corporations—because they were the only community of business able to afford the extremely high price tag—business intelligence has become democratized over the last decade thanks to affordable ‘pay-as-you-use’ applications and cloud-based technologies that scale accessibility and affordability to dashboarding and data warehousing tools.
Competency gaps and an absence of leadership are resulting in a new senior management role
Armed with a new set of ambitions, organizations are establishing leadership roles to drive the transition of people, processes, technology, and data to evolve a data-driven culture. The Chief Data Officer (CDO) role is growing in popularity as a standard-bearer. According to the latest research from Gartner, this role is intended to:
- To define and advocate the vision, priorities and role scope of a data-driven culture
- Transform the enterprise by prioritizing cultural change and fostering a data-driven orientation
- Apply asset management disciplines to select information assets and borrow ideas from other industries and competitors to monetize data
- Apply technology leadership and best practice to aid the data-driven transformation of their enterprise
Creating a data-driven culture
Creating a data-driven culture requires a culture change in many management teams that are accustomed to driving their business based on ‘hunches’ and ‘best guesses’ over what customers value and what they want. A digital economy means that enterprises no longer need to guess.
Jeff Bezos, the founder of Amazon is quoted as saying, “If you don’t understand the details of your business you are going to fail.”
In a digital era, businesses operate on data. Much of their opportunity is programmed into inbound marketing schemas and their operational performance depends on data analytics to execute hundreds of decisions based on fact—not gut feel—to fine-tune internal processes and minimize sales costs. Creating a digital culture requires a re-think in technology, people, process, and data management. This is where companies like NDMC Consulting come in; to help enterprises navigate their transformational journey.
Benefits
Creating a data-driven culture will help your business to understand customer behavior, react to market changes faster than your rivals and eliminate the unknowns. What organization would not want these abilities?
The transition from analog to digital business behaviors has been swift; a matter of a few years. Many enterprises find themselves on the wrong side of this wave, operating without good customer, product, business or market insights. They find their operations somewhat sluggish compared to the ‘SaaSy’ new kids on the block.
Adoption challenges
The most commonly reported barriers to a data-driven culture are:
- A lack of data literacy in management teams resulting in poor leadership buy-in.
- Suboptimal data analytics capabilities.
- Unclear data ownership and strategy.
- Challenges with data integration – Even with ‘lots of data’ stored in their back-office systems, many businesses find there’s an issue with getting access to the data tools and data scientists needed to really make use of the data assets they hold.
- Data quality shortcomings.
Attitudes toward a data-driven culture
Attitudes to data vary across businesses. Leaders generally see it as crucial and an opportunity, while many departmental leaders find it a tantalizing prospect that’s just out of reach. IT leaders, on the other hand, see data as a problem and a risk. And there will be many that see the surfacing of operational data as a risk, given that it might expose their underperformance. Bringing everyone on the same page will not be easy, but it is necessary to remain competitive in a digital economy.
Creating a data-driven culture is a change project like any other. To be successful, your business needs to be armed with the same state-of-the-art methods and tools that your competitors will be using. Nothing less will do. That means harnessing robotics and artificial intelligence, analytical visualization tools, predictive modeling, and automated escalation routines. Unfortunately, when considered in isolation, none of this technology will actually help your business to harvest its opportunity and grow. Like most changes in business, it will take a blend of ‘people, process, data and technology’ to become a successful data-driven enterprise—and the need to change attitudes and behaviors will as always take center-stage.
The Author
Ian Tomlin is a management consultant and strategist specializing in helping organizational leadership teams to grow by telling their story, designing and orchestrating their business models, and making conversation with customers and communities. He serves on the management team of Encanvas and works as a virtual CMO and board adviser for tech companies in Europe, America, and Canada. He can be contacted via his LinkedIn profile or follow him on Twitter.
Further Reading
Gartner – Why a data culture is important
Wikipedia article on Data Culture
CIO article – the four stages of data maturity