Creating a data driven culture requires more than high-tech software, integrations and reports. Simon Davidson explains that, unless a business as a whole is equipped to understand and utilise data, the amount of good it can do is very limited.
It’s becoming increasingly vital to improve data literacy across all levels of a business in a way that ensures employees aren’t just able to comprehend data, but are able to know what’s important, what it’s telling them, and how it needs to be communicated.
Sharing the data, as well as the skills and tools to understand it, will allow teams to better engage in the wider goals of the company by enhancing their overall awareness of the business and what it’s aiming to achieve.
Crucially, embedding a deeper knowledge of data will enable employees to have a more-nuanced role in the decision-making processes. This will ultimately allow for superior, better-informed judgements.
Start with a strategy
For a business to effectively implement data into their operations, it’s imperative to have a robust strategy to implement a data driven culture. This needs to be driven by the firm’s overarching goals, business situation and opportunities.
Ideally, it will include both defensive and offensive tactics designed to reduce risk, streamline operations and generate value. Numerous other factors also need to be taken into account, including the state of the market, regulatory requirements, customer expectations, competitor activity and the supply chain.
Upskilling the workforce is a key part of a complete data driven culture strategy. Employees need to understand the language of data and the role it plays and be able to question it when necessary, or use it to form part of the company’s storytelling.
This data literacy needs to span across the organisation, from the C-suite using it to inform strategic decisions to the customer-facing teams at the front-line of gathering and inputting data.
Opportunities and risks for data driven culture
Without a good level of data literacy across the workforce, it will be difficult for companies to improve operational processes or take advantage of machine learning, automation and artificial intelligence (AI). In today’s highly competitive marketplace, this issue is only going to become more acute, as businesses risk their competitors gaining an edge that they don’t have.
Not only could it stifle growth, but a lack of data literacy could even become a threat. Poorly managed data can put a business at risk through inaccurate intelligence causing flawed decision-making, and slow and expensive system implementations. Poor data management can also lead to the leaking of proprietary information, which erodes customer trust and damages the business’ reputation.
These risks highlight the need to educate all levels of the business, including customer-facing teams. For example, if a team doesn’t understand the information they’re gathering when acquiring customer feedback, then they can easily corrupt the reporting with inaccurate information or unknowingly commit regulatory infringements by not properly safeguarding sensitive personal details.
Developing data driven culture discussions
A key aspect of establishing a data driven culture is to thoroughly consider what’s important. A business can easily become overwhelmed if it tries to gather too much information.
It can be hard to narrow down all the data to just a small set of priorities. Always being aware of the company’s purpose and linking this to the data strategy is a good way to weed out irrelevant information.
Our team look at the 'data waterfall' when assessing this, as it shows the links between the strategy, business plan, management information and the data. It’s also useful to look at what sort of advantages you want to get, such as value creation, stakeholder management, business protection or operational delivery. These could all lead to the measuring of different metrics.
Once the data is streamlined and refined it’s much easier to use it and communicate across different teams.
CFO's thoughts on data driven culture
At a recent forum we hosted, chief financial officers from a range of mid-market businesses gathered (virtually) to discuss these issues.
The panel identified the ability to pinpoint the right information to gather and analyse as a priority. Some delegates told us they regularly reviewed their data and how it was presented, in order to make sure that stakeholders had the most relevant view, while others frequently surveyed customers and staff about what they need, so redundant information can be removed from the reporting processes.
A common issue at the forum was when data that was only required for a short time period would end up staying in the reports, which would cause confusion. This has been a particular issue recently, again highlighting the importance of all staff knowing the data and how it reflects wider business priorities so that they are empowered to cut out unrequired information.
Another challenge raised by attendees is how to integrate data from third parties. Many found this difficult, as customers or suppliers would provide information in incompatible formats or would be unwilling to take the time to input data directly into a business’ portal.
One attendee said that they were solving this by using software robots that can digest information from multiple sources and work it into one report. The use of software robots illustrates the ever-more specialised and complex systems that can be utilised, so long as the business itself is able to integrate them into their processes and knows how to make the most of them.
Creating a data driven culture
The cost-savings, efficiencies and operational improvements that the proper use of data can bring means that data analysis is transforming from a niche function to an essential part of most companies’ day-to-day working.
To ensure that firms and their staff have the skills to build a data driven culture, we’ve partnered with BPP to provide data apprenticeships designed to provide the technical and practical skills of data analytics alongside real world insights.
Investing in teams through apprenticeships such as these will help to unlock a wealth of advantages that come from integrating the proper management, use and awareness of data within the very structure of a business.
To learn more about upskilling your employees and creating a data drive culture, see our business consulting page.