Embracing a Data Driven Culture
What is a data-driven culture? Do you know if your company has one?
A data-driven culture can be defined as the organization's commitment to making decisions, solving problems, and creating plans based on data and analytics. It can also be described as an organization that leverages its data assets in order to make better decisions and more accurate predictions about the future.
A data driven culture is important because they help companies stay competitive by focusing on the important things.
Clarifying the Definitions
There are a few terminologies surrounding data cultures with different interpretations, namely data informed, data driven and data centric. We believe that the following definitions should be used.
Data Informed
A data-informed culture collects data as and when they require it, and usually present data as snapshots in time. Data may not be a strong driver for decision making. Many organizations fall into this category.
Data Driven
An organization is data driven when they are actively collecting data and using data in order to make better decisions. They rely on advanced analytics in dashboards that can show trends, outliers, key influencers and forecasts. They may also rely on machine learning and artificial intelligence.
Data Centric
Data centric cultures are reserved for companies who have data as a core product or service such as Google, or Ahrefs.
Therefore, we believe that most companies should strive to be data driven rather than data informed.
So how exactly do leaders create a data driven culture?
Importance of a Framework for Culture
Building a data driven culture can be overwhelming. There are so many different aspects and approaches that one can take. We believe that it is important to have a holistic outlook into building culture, and therefore we created a 3x3 framework that can effectively lead organizations in the right direction.
In order for an organization to become truly data driven, they must embrace data and analytics as part of their culture.
Creating a data driven culture is not an easy journey, it involves serious strategy, investment and fundamental shifts in mindset. However, any organization can start the journey to building and embracing a data driven culture.
This 3x3 framework is meant to be a guide and provides flexibility for organizations to adjust their approach. Different organization sizes may require analysis into their different country locations, departments, years in company and other relevant categories.
The 3x3 Framework for Data Driven Cultures
The foundation for a data-driven culture are the systems, processes and people. Any missing element of the puzzle would pose a huge challenge if you want to create a data driven culture.
For example, having the best technology for data analytics will not matter if your people are not equipped with the skills, or if they do not have the right mindset.
Each of these 3 key foundational elements are broken down into 3 key aspects. By examining these 9 elements, the organization can see their strengths and weaknesses. Armed with this information, they can make better decisions on where they should invest in to be successful.
Systems that Enables
The use of data can only be made possible by the systems and technology available. In modern times where we deal with large amounts of data, having the right technology and systems in place helps us leverage on our data assets.
The systems and technology must help enable easy access, redundancy and security to ensure appropriate use of the data. By setting the right KPIs and metrics to track in the system, you have quick insights into your data. This can enable decisions making in a more timely manner and actions taken swiftly.
It is also good to have a centralised place where you can have access to data and analytics in insightful dashboards. This allows you to easily find what you are looking for, as well as reviewing it before meetings. Having meetings with the dashboards can facilitate smoother discussion as they are presented consistently, and help enhance the effectiveness and quality of meetings.Equipping your people with the right systems and tools will be an important foundation, which will support the processes and teams.
Processes that Makes Sense
Having a holistic strategy is part of the process to creating business value and ensuring synergy with the outcomes desired. There must be processes in place to adapt the dashboards quickly to the feedback received or any changes to the business processes. This will allow changes to thinking model to be accurately reflected in the dashboards based on the right data.
Ensuring that knowledge on the data dashboards are shared across the business, and allowing teams to collaborate on the data is fundamental to address the need for communication and debate. Better insights can be derived from the data and creates the continual improvement process to your culture, allowing you to make decisions better as your processes evolve.
People that Add Value
People are the biggest assets you have, and data driven cultures can create a way to maximize the potential of your people.
Leadership plays a fundamental role in driving the direction of the culture. Leading by example, such as communicating using dashboards can build the right attitudes and behaviours we want to see. Having strong data leaders in the midst across all levels can help to improve the skills of others by understanding our people's strengths and weaknesses when it comes to how they use data and analytics. You might also need to invest to train and improve your people's data literacy.
Feedback channels available to people can support a stronger culture. By implementing feedback, there's reinforcement in the behaviours of positive data habits. With the right support from the management, you can bring the data culture to the next level. Having insights into the various areas for improvements can be very empowering to employees as they can see where they can make a difference.
By having data accessible for collaboration across teams, it fosters greater transparency and also helps build a culture more conducive for discussions. When data is clearly presented, there is less room for misunderstanding and mistakes less easy to hide. This builds better environments because we can be focused on improvements instead of fault finding, and making it easier to provide constructive feedback.
Data Culture Assessment
Our Data Culture Assessment, based on the 3x3 framework, is a tool to help businesses and organizations understand their current culture and what they need to do in order to become data-driven.
It helps to provide an overview into the different aspects of the culture, and how it varies across different departments and different seniority levels in your organization. The difference can provide insights into the disparity of what you expected and the actual sentiments from your employees.
With the gaps identified, you can assess it further and take the necessary steps to improve your culture. For examples, if the people aspect is weak, you might need to improve the leadership and organise training to improve those areas. By making strategic decisions to invest in those areas, you can better leverage on your data assets to deliver exceptional business value.
How an organization makes use of data impacts their productivity, decision making and business value. A strong culture can improve a business competitiveness and resilience.
A data-driven culture is fundamental to an organization's long term success
To build a successful data driven culture, data needs to be a priority and data analysis should be an important part of the culture's DNA. The systems, processes and people elements must be synergised to deliver superior outcomes. In smaller business, these may not have significant impact but as the business scales, it can pose significant challenges to the effectiveness of an organization.