8 Things Data Driven Organisations Do Better Than Their Competitors
Without a doubt it pays to be data driven. McKinsey Global Institute reports that data-driven organisations are now 23 times more likely to acquire customers, 6 times as likely to retain customers, and 19 times as likely to be profitable as a result.
Some organisations have business intelligence and market research departments, and many others don’t. Those who don’t are typically driven by the decisions of their senior management. What this means is that sometimes a handful of people work together to arrive to a consensus decision, and sometimes a single person - the CEO or the Head of a Department - makes a call based on their judgement alone. Unless their name is Steve Jobs or Jack Welch (well known autocratic leaders who got more things right than they got wrong), chances are their judgement or intuition or gut feeling (call it what you like) will not get them optimal results.
These are 8 things out of a long list of items that make a data driven company way better than its competitors:
They are built to last
CEOs come and go, some have great intuition, some less so. Some are extrovert and some are “level 5 leaders” to use a definition from Jim Collins’ book ‘Good to Great’, the sequel to ‘Built to Last’… which by his own admission should have been the sequel.
Culture eats strategy for breakfast
HBS Professor Michael Tushman says so. Being data driven encourages a culture whereby gut feelings and anecdotal information do not carry a lot of weight.
Transparent & Publicly Accountable
There are many sources and types of data. There are structured and unstructured data (such as text, images and video clips). There are facts and there are opinions. We can get opinions by asking questions in surveys and focus groups, preferably through online communities* or by analysing unsolicited opinions using social media listening, social intelligence or social media monitoring, however you prefer to call this new discipline. And then we have our own data from accounting; sales, profit, expenses; you get the idea. If all these data are available to all employees and everyone’s goals (including the CEO’s) are measured using these data, then we get public accountability through transparency. This point alone is enough reason for a company to decide to become data driven!
*Did you know you can create and fully customise your own online community? Start your cost and commitment free trial.
Fast & confident decisions
When a business decision is based 80% on data and 20% on gut feeling then it will be fast and confident. Companies that take a long time to debate and decide on something, and then even longer to execute are overrun and crushed by their competitors.
When decisions are not based on mood and appetite but on data they tend to be consistent and inspire stability to all stakeholders.
Curiosity is a vital characteristic of innovative people. Data availability allows the curious to find answers to questions. The more the questions and answers the more the successes.
Data literate employees
Abundance of data on its own will not do the trick. We need people to turn the data into information, then into knowledge and then into insight and hopefully foresight.
Talking about foresight, predictive analytics is what sometimes produces it. Without data predicting anything becomes a shot in the dark.
Becoming a data driven organisation is not possible from one day to the next. We need data, ways to analyse it and a data hungry culture with people that are data literate and buy into the concept. It takes commitment from the CEO and the management team and it takes perseverance. Unless there is objective data that supports a decision, regardless of how much we think we know what action to take, we should resist to take it and we should always ask the question: what data supports this decision?
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