The key to becoming data driven? Start with data culture
Firms are becoming less data driven according to a new survey from NewVantage Partners (LINK) which surveyed 64 C-level executives from large US corporates such as American Express, Ford, General Motors and Johnson & Johnson. . 31% of firms said they were data driven in 2019 versus 32.4% in 2018 and 37.1% in 2017. This is in contrast to the 87.8% of executives who talk about having a greater urgency to invest in data-driven initiatives and nearly 92% of leading companies that are increasing their pace of big data and AI investments. Standing in the way of this was that people and processes were identified as being the blockers to 93% of the survey respondents and technology was identified as being the blocker in only 7.5% of survey answers.
So what is happening here? We're seeing a declining rate in the belief of firms being data driven but more and more are wanting to become data driven. There are a couple of things including that the marketing hype around what big data is and what firms are actually seeing in terms of results is misaligned. The above was highlighted in a recent article from Forbes (LINK) which calls for the need to stop talking about big data and the need to start thinking about data culture.
Additionally, I see that these results also speak to firms seeing what true data driven cultures look like from their peers and all of the marketing that data technology vendors throw at them. Seeing a process, dashboard or culture that is better than one's own can tend to make us think that our culture is less data driven than others and drive the urge to make ours better.
Harvard Business Review (HBR) also highlights the NewVantage survey in its 'Companies Are Failing in Their Efforts to Become Data-Driven' article published earlier this year and also, like Forbes, sees that changing the company cultures is a key to success if firms want to become more data driven.
All of these findings show that becoming data driven is not as easy and whether firms like it or not, the way to become more data driven has to start with cultural change.
The Forbes article highlights couple of key points in their article. I mention these below (bold) as well as my own take on them:
Consider data your biggest asset - this is key amongst the others and speaks to firms needing to look towards ways to centralise the data they have which can relate to their customers, internal assets or the market. Finding ways to bring this together will reap great rewards when they being to start data mining this new data lake for insights.
Create a data strategy task force - this helps to ensure that becoming data driven has more than just initial momentum behind it. A task force puts a serious stamp of approval on the requirement to use data more in an organisation and, in many firms where this is not the case, gives employees an exciting project to get on board with.
Identify your data management practices and business rules - as much as I've hated having to document processes in my previous roles, I've seen how important it is to do this. We become bottlenecks if we just keep processes in our heads and don't write them down. Knock on wood that we get hit by a bus the next day but there are many other reasons why writing processes down is important. One of the key things I've found is that by writing things down, it's easier for me to refer to them months or years down the line. This is especially true for data experiments I've run that for some reason or another have had to be parked. Coming back to something later that could now prove useful is made even more pleasant when I've documented it well.
Build a roadmap - this is something I've seen many firms think that they can do this on their own but end up sorely missing the mark when they don't seek outside advice. Having been on both the customer, consultant and vendor sides of the data technology triangle, I can truly speak to the need to seek out more information than what resides in your own offices because you will either miss important information or misconstrue concepts like pricing and end up making poorer decisions.
HBR identifies another interesting factor which can help firms become more data driven and that is to not focus on the overall enterprise becoming data driven, but to focus on a specific project or goal. Projects like this that can move the company in the right direction can become the catalysts for more widespread change. I've certainly seen this in projects I've worked on over the last 10+ years. Having a small but successful data project can draw other parts of the business towards looking at ways that data/technology projects can help them.
These are definitely though-provoking articles and whatever the level of sophistication your firm has with data, what's important to know is that they can always be improved. The key will be to identify ways in which you can start to get better. Driving cultural change is no easy task but thanks to articles like these (and many more online) you can see some examples of how you can get started.
So, what are you waiting for? Start thinking about becoming more data driven and what ways you can drive a better data culture today
Note: credit should also go to Emmett and the folks over at EagleAlpha for the link to the original Forbes article. To see their newsletters and other articles sign up here (LINK).