We are drowned in oceans of data; nevertheless, it seems as if we seldom have sufficient information.
Today, companies are generating more and more data—but more data doesn’t necessarily translate into better performance. In fact, as various functions in the organization collect more and more data, it’s easier than ever to lose sight of the insights that matter.
As leaders, it’s our responsibility to make sure that the right data is collected and analyzed appropriately, and that it drives decision making throughout the organization. In other words, we have to create not just data-driven organizations but data-smart ones as well. There is room for improvement: currently, 73% of big data projects are not profitable.
Here are my top six traits that tell me an organization knows how to collect, apply, and learn from data.
1. Data collection begins with clear, well-communicated priorities.
The best data-driven organizations show a preference for data that is meaningful to the organization. Clear goals are set at company and department levels, and each goal is paired with a well-chosen metric or metrics. These companies don’t just measure everything that can be measured—which would overburden the team significantly and actually impede the CEO’s ability to make good decisions. Rather, they judiciously decide which metrics best measure success and gather data in that context (and regularly reassess the metrics they are tracking).
2. Executives are comfortable with data transparency.
Department heads shouldn’t horde data or refuse to share it across the organization. A strong data-driven culture requires cross-functional visibility, an understanding of what each area of the business is measuring and why. Although some may be reluctant to openly share data, they should understand that the focus on data is not intended to scrutinize or punish but rather to identify how everyone in the company can succeed together.
3. The CEO buys in.
Data efforts need to be championed from the top; the CEO must own the process of setting up integrated systems and processes for sharing information. The CEO must communicate to the entire organization about the type of date he/she values and why each person must be part of the process.
4. Everyone’s in the data game.
A data-driven culture is democratic: everyone, down to the frontline, has access to key data, and is encouraged to gather and share their own data. After all, some of the most valuable data can be found on the frontlines, where employees are doing the actual work and/or interacting with customers. Also, all employees should be able to see how their own daily activities contribute to the key metrics tracked by the organization.
5. Data is well packaged.
Passing around lengthy spreadsheets full of raw data rarely does any good. Instead, leaders who are part of a data-smart organization understand how to distill complex information into concise, practical insight. Data should be analyzed and interpreted by the person who knows the most about it, then packaged in a way that separates the signal from the noise, often in a visual dashboard format. This prevents the CEO from having to parse data he/she does not fully understand and allows anyone in the organization to benefit from the data. (Not coincidentally, this is exactly what Khorus provides to CEOs each week.)
6. Leaders value predictive, qualitative insight over raw data.
Data-driven cultures encourage employees to give their unique perspective and insight on the data they’ve collected. You want them to not just report the data but to give you a brief editorial. Two types of employee insight are particularly valuable to achieving positive outcomes in the business: predictive insight, or the employee’s guess as to whether their projected outcomes will be achieved on time, and qualitative insight, the employee’s take on the quality of the work behind the data, which can often surface part of the story not reflected in the numbers.
7. Everyone uses data to drive decision making.
Of course, data collection and analysis should never be merely an intellectual exercise. In a data-driven culture, data is used to inform decisions at all levels of the organization. After decisions are made, leaders seek objective data to verify whether the right decision was made. They also seek sources of objective data outside the business, especially about the industry and competitors, to inform future decisions and test assumptions.
If you’re looking for a systematic way to support your organization’s data culture, please get in touch about Khorus. Created by a CEO for CEOs, the platform offers:
- A cascading goals framework capturing key metrics across the organization
- Weekly companywide forecasting around company priorities
- At-a-glance visual insight into the health of organizational goals and metrics