That elusive data-driven culture...

Is it even possible for an organisation to be completely data-driven?

* Originally presented at the WorkSafe & TAC Power BI Analytics Forum - published here with some changes.

The Economist, in May 2017 published an article titled?“The world’s most valuable resource is no longer oil, but data.”?This put the spotlight on data and industry experts started to recognise “data centricity” as the next big thing in business. Data has always been important to organisations but now it has taken centre stage.

This need for enterprises to become data-driven is a reaction to a prominent cultural change and economic shift known as?industry 4.0. Data supports breakthroughs and will continue to fuel the 4th industrial revolution. Without a doubt, data is the new fuel and many are making an effort to leverage data to thrive in this new marketplace.

As more and more enterprises and institutions begin to realize the latent power of data, the phenomenon of the “data-driven organization” continues to gain momentum.

But what is a data-driven organisation??

The concept of “Data-Driven Organization” is not new. It is simply an enterprise that makes decisions based on?facts?rather than on opinions, gut feelings, or emotions.?

In Data-Driven Organisations, Data is at the center of every action, and data is treated as a strategic asset.?

?In such organisations, data strategy is closely intertwined with organisational strategy. In such an organisation, data-driven decision-making does not occur only in some areas of the enterprise but across the organization. From the top of the organization, across the teams and business units, every employee is aware of the value of data and knows how to access relevant data and use it to inform and support decision-making.

How important is it to be data-driven?

According to a McKinsey survey,?data-driven organizations?are 23 times more likely to outperform their competitors in many areas - such as new customer acquisition and customer loyalty. In this new data-centric economy, to compete successfully, organisations must pay careful attention and invest in getting value from their data.

Gartner's research?found that Data Analytics and AI are the practice and technology which is expected to be game-changer for organisations to emerge stronger from the pandemic.

Despite the prevalence of data, in 2022, an?HBR study?revealed that just 26.5% of organizations report having established a data-driven organization.

To thrive in this data-centric age, organizations need a robust data strategy, a data-literate workforce and a strong?data-driven culture.

Data strategy defines how the organisation achieves its business outcomes using data strategically. Data strategy and an organisation's strategy are interlinked. Data strategy supports the overall business strategy to provide the greatest possible result for the organisation.?

A “data-driven culture" is an organisational culture in which insights and actions based on data are pervasive across the organisation.?

In such organisations, accurate data is collected, stored, and made?readily available?to anyone who needs it, as are the tools and skills to?analyze,?interpret?and?visualise?the data. It is a state where there is minimal manual intervention; in its place, orchestration and automation are the norms of the day - reducing the chances of human error and single-point dependencies or failures - thereby driving swift and effective action.?

Are there any barriers to becoming data-driven?

Being data-driven involves more than just investing in the best technologies, it is more than just collecting all the organization's data, storing and modelling it, and it is more than recruiting the best analysts, data engineers, and scientists to interpret the data. Data alone does not make an impact. Data alone does not drive change. Having the best data does not change the course of any organization for the better.

To have any meaningful impact, there has to be a real shift in how the organisation views and uses its data - daily. A truly data-driven organization regularly utilizes data-driven insights in every aspect of decision-making.?

In an?HBR survey 91.9% of executives?cited cultural obstacles as the greatest barrier to becoming data-driven. Organizations with a good data culture value data-informed insights and data-derived decisions and the use of data are championed in every employee day to day activities.

What are the elements of data culture?

How an organisation builds, implements and interacts with its?People, Processes, and Tools?has a?direct impact on its data culture.?Organisations can bring about a positive data culture change by working on these three aspects of the enterprise.

Under?People?- organizations need a management team that embodies and encourages data literacy and harbours a willingness to learn new ways of looking at data.

As Peter Drucker aptly put, "Culture Eats Strategy For Breakfast"; this is true not just for work culture, but for Data Culture as well.??

But how does one change the culture of a workplace??

It starts at the top with leadership that appreciates the critical role data plays in the organisation's strategy and is willing to invest the time, effort, and money towards building data Centric organization.

Changing culture takes effort, it takes time, it takes deliberate planning and action; and it should be readily adopted and promoted by the entire leadership team.?

Culture and leadership are intrinsically connected. If the leadership is not convinced of the real need for a cultural shift in how the organisation views and uses its data - culture change will not take place - it'll be an empty gesture, a hollow formality with no real outcome.

To bring data to every decision-making, leaders need to 'tear down silos,' they need to remove any barriers to the use and access of data and should require data to justify every decision - especially ones that impact the organisation or its customers.

Under processes, Organisations need to have the right support services in place, it needs data literacy and training programs for their employees, it needs data and platform governance, and security measures in place to ensure the organization's data is not compromised. Organizations need to know the key metrics and how to use them to improve their function and have a data road map to understand where it needs to go and how to get there.

A data-driven culture can be realised when everyone across the organisation has access to the data they require in a way that is intuitive and unrestrained.

It is the primary role of the data teams to ensure unnecessary barriers are removed for those who need access while putting guardrails in place to secure the data. In a healthy data culture, there are frequent cross-team collaborations. A data-driven culture embraces a culture of sharing and promotes ideation and innovation.

Finally under tools: organizations need to have the right tools and technologies that will enable relevant teams to collect, clean, store, analyze and visualize their data. But oftentimes there can be technical or process barriers. Employees are often unaware of what tools are available, how to get access or how to use them.

According to a global study by?BARC and Eckerson Group, adoption rates for BI/analytics tools is in the 20% range.

This low-level adoption of Analytics platforms is often a result of the barriers to getting access to data and analytics platform or not having the right skill to use the available platforms. When these barriers are removed, the adoption rates go up, the data literacy improves significantly and the organization becomes more data-driven.

Choice architecture guarantees that removing barriers to access, providing platform training, and offering users support along the way will greatly increase the adoption of any analytics platform and help the organisation become data-driven.

Not everyone in the organisation needs to be a data analyst, a data scientist or a data engineer. But everyone can benefit from 'data skills.' This includes knowing what questions to ask, how to get access to the data, how to interpret the findings, and how to present data stories.

The real value of being data-driven is seen gradually over time. It is much like exercising and eating a healthy diet. It takes a while to see the results, it is cumulative and there will be dragons to slay along the way but once the organisation starts seeing the tangible benefits, it'll never want to go back.

But just having the right tools and processes in place is not enough to ensure the organisation is data-driven... and this is where everyone plays a role. Everyone in the organisation can help build a robust data culture by learning to use the tools, insisting on data for decision making, sharing data insights and encouraging others to use and value data.

When everyone treats data as a valuable asset, the organisation will inevitably become data-driven.