All too often, we rely on our “gut” to make decisions. When something doesn’t feel right, pattern and practice tells us that it isn’t.
And while instincts will always play a role in business, we need to approach decisions with the reason and analysis they deserve. Otherwise, we end up falsely diagnosing our problems and wasting our efforts in creating solutions.
That’s why it’s so important for companies to establish data-centric cultures.
In a data-centric culture, you research and analyze business challenges and opportunities with the data at hand, not with your gut. The impact of data is understood and treated as an asset for resolving issues, developing business strategy, and supporting innovation. You have a reliable view of the current status, historic trends, and past casualties, which can help drive and guide decisions for the future.
Obstacles to Becoming Data-Driven
Obviously, not every company has that type of culture. Part of the reason could be that most of us don’t like redundancies. We resist routines, and a data-centric culture relies on us to follow processes. It asks us to not skip steps — even the ones that don’t have clear, immediate value. That can pose a challenge for many companies to get everyone on board.
We don’t always see the importance of documenting our standards. We fail to consider how certain information could potentially be used at a later stage in the process. As a result, we don’t take the steps necessary to preserve the integrity of data.
Let’s say, for example, you run a professional training firm, and one of your associates mocks up a quick and dirty calculation of costs for a new course. It’s all based on a few of his assumptions. The team likes what they see and moves ahead with his math, but no one goes back to list out the assumptions made as part of that calculation.
Eighteen months later, maybe the training course becomes a success, and your firm is scaling it up and out to franchised partners. But what if your associate decides to leave and he takes his assumptions with him? You’re now left with the difficult task of recreating the information.
Three Simple Strategies
Though not all data is created equal, it’s important for everyone to document and collect it along the way. It’s also important to understand how it’ll be used in the future. Here are three ways to start moving your company culture toward becoming data-centric:
1. Connect data to the company’s value or supply chain. Conduct a formal meeting to let everyone see the connection of information throughout the chain. Share examples of where the chain is broken and how it affects the business, such as dissatisfied customers or a loss in revenue. Understanding the full weight of data can instill greater ownership and accountability in your team.
2. Create transparency around the standards and rules of data. When DATUM rapidly grew the team and had to distribute responsibility between more team members, we spent significant time on the definitions and standards of the information we were keying our decisions off of, and we make it clear how various sets of information were related and would affect the data output we looked to analyze. Revenue and gross margins would be impacted which, in turn, would affect the ability to hire new team members, spend more on marketing and sales, etc.
3. Reward data-centric behaviors. Celebrate activities, events, and people associated with data-centric execution. Consider holding monthly meetings where you share data success stories. It’s an opportunity to help everyone better understand the connection of information through the entire supply chain of your company. From messaging and sales to delivery and customer adoption, it can show your team how important data is not only to the company, but also to its leaders. People are more willing to go the extra mile when they know they might earn recognition.
As long as you help your employees understand and use the tools and technologies to capture data, you’re in a good position to drive full adoption. Of course, as a CEO, you have to eat your own dog food and lead by example. And if you do, you’ll have a company that frequently and accurately documents data. And while the benefits might not present themselves right away, that’s not how data works. In the long run, it will pay off.
Feature image courtesy of Shuttershock.