How to Make Your Organization a Data-Driven Organization
Access to data is easy for most organizations. But access does not equal advantage. The real challenge is knowing what to do with all of that information: understanding which data can produce an edge, where and how to obtain it, and how to draw accurate insights from it.
PwC reports that 89% of U.S. operations and supply chain leaders said their technology investments had not delivered the expected results, and 87% pointed to poor data quality as a drag on the value of their digital initiatives. Becoming a truly data-driven organization is the way to close those gaps.
This takes having leaders who can maintain meaningful oversight of their organization’s digital programs and ensure they work as they should. It calls for people who know how to guide an organization through change: trusted leaders capable of aligning teams around shared goals and making sound decisions in the face of uncertainty. Developing these capabilities often means pursuing focused, advanced education, such as a Master of Arts in Leadership program focused on preparing professionals to lead with strong ethical and transformational practices within their organizations.
Key Traits of a Data-Driven Organization
In data-driven organizations, leaders run operations and base their decisions on data, relying on metrics and trends to move the organization forward. Each organization pursues that effort differently, but they all generally have a few of the same traits.
Making Decisions Grounded in Evidence
A leader might rely on their instincts to make certain decisions, such as when they choose to hire a candidate because the person felt like they were the right fit for the position. Leaders are expected to make those types of judgment calls, but in a data-driven organization, most of their choices are grounded in data, such as customer feedback, market trends, and financial data. A decision based on evidence can reduce uncertainty and increase confidence in the decision.
Implementing Feedback Loops
What sets successful organizations apart is their employees’ skills, how efficiently their processes react and scale, how ambitious their goals are, and how well they make decisions. A data-driven organization uses data to shape and improve its business and operations, creating feedback loops that keep it adaptable and responsive.
Ensuring Data Can Be Reached, Tracked, and Trusted
Since data often sits in various systems and formats, it is integrated in data-driven organizations, so that it’s available to use. It is easy to track how systems reach their conclusions and easy to trust that the data is valid through strong security and regular accuracy testing.
Benefits of Being a Data-Driven Organization
Integrating data and sharing it across teams, rather than keeping it locked in silos, can improve an organization’s success in achieving meaningful change. PwC found that performance gains in speed, accuracy, visibility, and collaboration were higher in companies operating with collaborative, horizontal structures than in their more siloed peers.
Embracing a data-driven approach can bring many positive outcomes for organizations across industries. In Rhode Island, the state Department of Health and the state Medicaid agency set up a data-sharing agreement so they could jointly gather and evaluate results from a program that provides in-home asthma counseling to families of high-risk children. Pooling data that each agency held separately let them measure how the program affected patients in ways neither could have assessed alone. That evaluation found the program cut asthma-related hospital and emergency costs by roughly 75% after one year, according to Pew.
Here are other common benefits that organizations often enjoy when they make data a key part of their operations.
Better Understanding of Customers
Data reveals what customers prefer, and organizations that use those insights well improve their chances of keeping them. Companies put customer data to work in several ways:
- Building data-driven targeted marketing programs that engage prospective customers
- Analyzing customers’ browsing and purchase history to power recommendation engines that create personalized shopping experiences
- Tracking what customers watch or read to keep current customers engaged with content they are likely to enjoy
Better Strategic Planning and New Growth
Good data can help organizations plan for the future and identify opportunities to grow. Organizations use data to do several things:
- Anticipating trends and challenges through predictive analytics
- Identifying untapped customer segments by understanding how their market moves
- Developing new products and services to meet demand
Stronger Leadership and Public Outcomes
Benefits from prioritizing data in decision-making show up in areas beyond sales and profits. Data-driven methods can improve organizations’ outcomes in the following ways:
- Identifying the skills and practices that predict strong performance, then building them through focused training and development
- Directing resources toward the programs and interventions that the data shows are working
- Coordinating across agencies and departments by sharing data insights
6 Tips for Making Your Organization Data-Driven
To become a data-driven organization, it helps to focus on several parts of the operation — culture, access, and skills — and find ways they can work together.
Here are some tips for organizations seeking to make the transition.
1. Lead With Clear Objectives
The first steps for leaders include demonstrating their commitment to a data-driven approach and providing clear direction and objectives. Well-defined goals are also useful, as they provide a concrete direction for the organization’s priorities so all employees know where to direct their efforts.
2. Make Data Accessible and Governable
Accessible analytic tools and platforms democratize employees’ access and analysis, while accurate, trustworthy data builds confidence in its usefulness over time. Good data governance does this by establishing standards, roles, and responsibilities for the collection, storage, and use of data, making it clear who is responsible for what.
3. Invest in Employees’ Education
Employees often fear working with data, and a skills gap can harm efforts to become a data-driven organization. To bridge this gap, leaders can invest in training their employees and address their doubts through transparent communication.
4. Build Collaboration Across Teams
Sharing data makes the insights gleaned from the data stronger. Teams that share insights and lessons learned often outperform those that keep data centralized. This openness enhances the speed, accuracy, and visibility of the teams’ work.
5. Get Ready for Changing Roles
Artificial intelligence and automation are taking over routine tasks, and new roles are emerging in data-driven organizations. Leaders can plan for that shift now, through training current employees and updating their hiring practices to help keep their organization on track.
6. Treat the Effort as Ongoing
Building a data-driven culture requires an ongoing effort. Periodic reviews of processes and technology with regular feedback to employees can strengthen the program over time. Outcomes can get measured against goals, and strategies can be adjusted as needed.
Prepare to Lead a Data-Driven Organization
According to McKinsey & Co., companies are heading toward “data ubiquity” by 2030, a state in which current data is always available to employees and built directly into the systems and decisions that drive automated action. However, human oversight will remain crucial. What this trend means for leaders is that guiding an organization will depend more on building and overseeing the systems that turn data into action.
The Master of Arts in Leadership program at Belmont Abbey College prepares students to lead ethically and effectively in any industry. Its curriculum, with courses such as Leading in a Data-Driven Organization, Organizational Change Management, and Leadership and Innovation, is grounded in the principles of servant and transformational leadership and is designed to enable students to build a strong command of organizational leadership theory and practice.
If you’re interested in learning more about how to lead and thrive in a data-driven organization, contact Belmont Abbey College today to find out how the program can help you reach your career goals.
Recommended Readings
How to Successfully Lead Through Change
Key Traits of Effective Nonprofit Leadership
Servant Leadership vs. Transformational Leadership: Key Differences
Sources:
IBM, “What Is Data-Driven Decision-Making?”
International Institute of Business Analysis, “The Challenge of Creating a Data-Driven Organization”
KMPG, “Build a Data-Driven Culture in 8 Steps”
McKinsey & Co., “Charting a Path to the Data- and AI-Driven Enterprise of 2030”
Pew, “States Can Use Data-Driven Partnerships to Improve People’s Health”
