Companies with data-driven cultures use analytics regularly to make choices about their operations and view data as a resource that should be shared by all. Although many companies have data, very few are truly able to use it to boost customer value. Companies that are data savvy are more likely to see growth in this present unstable market than those companies that continue to function in data silos.
You can use this guide to create a data-driven culture that transcends different teams and varying levels of technical competence.
What Exactly Is A Data-Driven Culture?
Making decisions based on statistics and insights gained from data is the essence of a culture powered by data. It involves abandoning the conventional method of making decisions based on assumptions and gut instincts and promoting the use of data in all daily tasks and operations across all departments.
In business, pushing boundaries frequently pays off, but this does not mean that businesses should seize opportunities without thinking things through. This is where the data-driven strategy comes into play. What does the term "data-driven" mean? Data-driven refers to a strategy method of utilizing data insights to find new business possibilities, provide better customer service, increase sales, and more. It enables companies to carefully prepare and make decisions based on facts in order to fulfill their business goals.
A data-driven decision is based on empirical evidence, allowing leaders to make educated decisions that result in favorable business performance. A decision-making process that is primarily based on guesswork is the direct opposite of one that is data-driven. Data-driven business leaders may consult their instincts when making decisions, but they only take precise measures in response to what the data shows.
How to create a data-driven culture
The major objective is to enable employees of the company to proactively use data to improve their everyday work and to realize their full potential by facilitating quicker decision-making, more valuable customer discussions, and strategic thinking.
Start with these steps and maintain the appropriate infrastructure to create a data-driven organization.
1. Start at the very top
Data-driven culture starts at the top. Companies with strong data-driven cultures tend have managers who set an expectation that decisions must be anchored in data — all the time. They lead through example and board reports refer to data-driven decisions made throughout the organization.
2. Improve data transparency and organization
A common struggle, for companies of all sizes, is keeping data organized. New solutions are often implemented without consideration of whether they’re compatible with existing software. One functional area may prefer the features of one kind of software, while another team opts for a different legacy product. The lack of organization leads to confusion and, subsequently, poor data transparency. Data-driven organizations benefit from more precise methods, which improve data transparency.
3. Standardize processes
Your team may be comfortable conducting business one way; another team may prefer different methods. While each team’s processes may work fine individually, enough differences exist to cause hiccups when forced to merge. Data-driven organizations rely on standardized processes, which let data flow with routine and predictability.
4. Measure with variety
Rather than measuring the same things each year, it pays to mix it up. Organizations that are data-driven are in an advantageous position – having data at their fingertips - because they can identify a mix of measurement criteria. The variety of that approach offers greater insight into data and a richer set of predictive tools.
5. Invest in analytics tools
Data-driven organizations appreciate the value of a business intelligence (BI) solution that delivers analytics functionality. Cloud BI tools like Phocas provide real-time value while being scalable, secure, and available on-demand. Mobile functionality adds an additional layer of opportunity, allowing users in data-driven cultures to access information from anywhere, allowing remote productivity.
With Phocas, you have an easy-to-use but powerful analytical capability in which users can access layers of data in seconds. Phocas is a comprehensive solution that helps organizations to begin their data-driven culture journey.
6. Turn data into action
This is the crucial step in building a data-driven culture: turning the data into insights and action. It’s also the step where many efforts to instill data culture stall out—because it requires data users to change their behavior and develop new habits.
It’s important to start establishing the mindset shift from the top down. Create the expectation that data should drive key decisions and model a focus on analytics and reporting. With the right data stack in place, everyone in the company should have access to activation capabilities that lend themselves to actionable decision-making, like:
Easy audience segmentation
Quick A/B testing
Simple, digestible analytics and reporting
Metrics are another key piece of this puzzle, too. Your data stack should ensure each team has access to the metrics that matter for them—numbers that actually facilitate everyday decisions within that role.
7. Monitor and refine your data culture
Fostering a data-driven culture isn’t a set-it-and-forget-it kind of thing. You’ll need to consistently monitor teams and data setups to ensure:
- Everyone continues to feel confident deploying data in everyday decisions (and balancing it with their own experience and intuition)
- New hires are brought up to speed on tools and expectations around data use
- Your stack continues to meet each team’s needs as they evolve—supporting, for example, the adoption of new tools or new practices, such as Artificial Intelligence (AI) and Machine Learning (ML) predictions
Why is a data-driven culture important?
Relying on gut feelings and assumptions has always been an unsustainable strategy. Becoming a data-driven organization not only empowers teams to use insights for improving decision-making but also makes processes more efficient and effective.
It’s about making sure you double down on your core competencies and avoid mistakes that could derail your digital transformation and business growth. Now there are many advantages associated with a data-driven culture, but here we'll look into some of the important ones.
Supports progress tracking and transparency
When you’re competing in a fast-moving market, you’re moving multiple pieces of your operations in tandem. But the trick to succeeding here is to ensure you’re making progress on all fronts by keeping them aligned.
A data-driven culture helps move away from using data for mere report generation weekly or monthly. It instead is focused on developing a transparent report functionality to provide a holistic view of all functions.
Improves coordination and consistency
A 360-view of all functions and their progress further enables automation for mundane tasks and coordinated efforts across marketing, sales, support, and other functions. This improves how a product, service, or process is delivered to the end consumer.
Increases productivity and improves team effectiveness
With better progress tracking and coordination, a data-driven culture helps define the constants and the dynamic elements across all functions. This allows departments to define their work scope clearly, align their day-to-day tasks, prioritize activities based on what data indicate their attention is required, and deliver on time, boosting productivity on all fronts.
Improves workforce engagement
Most organizations see their workforce drop off mid-operation due to a lack of employee engagement or interest. But both reasons are driven by the lack of definition of what they’re supposed to achieve and how they can move towards it. A data-driven culture helps tackle both.
Saves costs and drives higher revenue
With better coordination, progress transparency, and better business decision-making, a data-driven culture promptly helps organizations identify loopholes and opportunities in their growth strategy. This helps save costs by avoiding activities and tasks with a higher chance of failure, doubling down only on those that add value to the end goal.
