One Step Closer to a Data-Driven Culture
By: Inbal Gilead
Tags: Metrics, Data Driven, Analytics

What Does It Mean to Be Data-Driven?

Data is an important resource for growth and innovation.

A data-driven organization places data at the center of every decision-making process, treating it as a valuable asset. The 2 pillars on which a data-driven culture is built are data collection and free access to data.

Take the stock exchange as the ultimate example of a data-driven system. Data plays a big role in setting the prices of assets on the stock exchange; Every investor in the world can access relevant data collected as financial reports, news and alike and use it to make his decisions.

Why is Being Data-Driven so Important?

Data-driven discussions are more efficient; Having concrete evidence to support claims enables better focus and faster decision making. Organizations that allow data to propel them to success usually have a growth mindset. The data-driven culture empowers people to take risks, seek innovative solutions to problems and challenge the status-quo using properly collected and analyzed data. Successful organizations consistently turn data into actionable insights. Data is a driver of change, enabling organizations to explore their options and allowing them to focus on the most suitable path for them. Properly-used data will allow companies to make informed choices and strategic changes to support their growth. Data can even help to create (or discover) a sustainable competitive advantage.

How is Data-Driven Culture Being Managed?

Data-driven culture relies on relevant data that can be trusted to be utilized into actionable insights and determine next moves. In order to achieve value, data should be properly managed. Relying on “bad” data can result in very bad decisions. The decision-making table should have an analytical lead who can properly interpret and explain the meaning of the data in order to bolster or undermine existing decisions and lead management to make new and innovative informed decisions.

3 Simple Steps For Your Organization to Become Data-Driven

1. Single Source of Truth

A central database that everyone can pull from, thereby eliminating the risk of having to mitigate different versions.

This can often be done by simply deciding and enforcing the decision of what the SSoT is. Other times there can be plenty of work around enabling its mere existence. Either way, it’s the healthiest concept to aspire to and will ensure healthy data architecture as well.

2. Consensus Metrics

A set of well-defined metrics that create a common language and help align the organization on goals.

A quick win can be achieved by creating a wiki of all existing metrics in the organization, then iterating on merging proximate definitions and clarifying the remaining. In most cases, once centralizing these metrics, you’ll discover there is a limited number of metrics that are really interesting company wide. Now that they’re well defined and agreed upon, these are your consensus.

3. Democratization of Data

Making data accessible widely in the organization, supporting a culture where everyone should use data in their everyday work.

Start asking the “why” questions more often to drive data as a habit. An important part of democratization of data is providing the training and support needed for meaningful analysis.

Insights:

A data-driven culture enables companies to make optimal decisions and to maximize their potential. The reason it’s considered a “culture” is that using data is contagious; The only way one can argue a data-driven decision is by presenting counter metrics, which justify one’s position. So once decision-makers decide that this is the way they’d like to work, the entire organization “magically” aligns.

An analytical lead is a must in order to seriously utilize company data. You’d be surprised how much a single analytics expert can contribute when given the right access, even without a team.

Establishing a good data operation is not cheap in resources but the gain multiplier is on a much larger scale, going from big to huge. Once you become data-driven you quickly understand the positive impact it has on your company and its bottom line.

Lastly, it’s important to note that operating in this way is not binary but rather on a spectrum. This enables organizations to improve at their own pace while achieving value almost from day one, which is a major advantage.