Getting Started with Data-Driven Decision-Making

Data-driven decision-making?(sometimes abbreviated as DDDM) is the process of using data to inform your decision-making process and validate a course of action before committing to it. While intuition can provide a hunch or spark that starts you down a particular path, it's through?data?that you verify, understand, and quantify. According to a survey of more than 1,000 senior executives conducted by PwC, highly data-driven organizations are?three times more likely?to report significant improvements in decision-making compared to those who rely less on data. The ability of organizations to effectively collect,? analyze and use data is critical to success in the information age.

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Examples of data driven decision making

A simple example of data driven decision making, is conducting a survey, to inform which product feature is most desired by your customers, before investing time and effort to enhance a product feature that does not address the main needs of your customers. You could extend decision-making to inform design decisions, by creating two prototypes of a landing page for a website, exposing both to a different sample of customers, then collecting metrics such as click through rate, to make a decision on what is the most optimal page design, before spending a significant portion of your advertising budget for the period.

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Case study

Google, in its now famous “project oxygen”, researched and analyzed? internal data, hence determining that great managers are essential for?top performance and retention. It further identified the eight characteristics of great leaders. The data proved that rather than superior technical knowledge, periodic?one-on-one coaching?which included expressing interest in the employee and frequent personalized feedback ranked as the No. 1 key to being a successful leader. Managers are rated twice a year by their employees on their performance on the eight factors.

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Benefits of data driven decision making

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Some of the benefits of data driven decision making include:

1. ?Improve confidence in your decisions. Instead of trying to convince the stakeholders that what you are feeling in your gut it the right course of action, use data to demonstrate the problem, research and test the solution, collecting and using data to make your case. Opinions are debatable; Data supported decisions are less debatable.
2. Increase Proactivity. A culture of collecting and analyzing data for use in decision making, will foster proactivity through early detection of opportunities or threats, which you can respond to in an informed way before the impact becomes too serious.
3. Improve accuracy and efficiency. Data analysis can identify patterns and trends that may not be evident through subjective judgment .
4. Increased accountability. Decisions made based on data, are easier to justify and defend. Transparency in data usage allows for tracking and evaluating the impact of decisions over time.

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How can you get started with data-driven decision making?

1.??? Change in mindset. Become an advocate for data driven decisions. There are several examples and research which demonstrates the tangible benefits that organizations are experiencing by adopting this mindset. You may encounter resistance, don’t be deterred. The old guard will seek to maintain the status quo of gut-based decisions (which certainly has its place), but rally fellow believers to your cause and seek opportunities to make your case showing how data driver decision making can contribute to the organizations success.

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2.??? Change in practices. The proof of the cooking is in the eating. You'll have to use data driven decision making to demonstrate that using data driven decision making is beneficial to the organization. Work with your fellow believers to identify opportunities to apply this practice. Ideally this should meet the following criteria:?

• It is directly tied to organization value, such profit, revenue, cost, or customer satisfaction.
• The data is easy to collect or readily accessible. The results are measurable
• It does not take a significant amount of time of cost to analyze the data, make a decision and test the results.

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This will serve as a proof of concept for data driven decision making,? which you can present to the skeptics. As you win more people ton your cause, start to extend the practice within different processes within the organization.?

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3.??? Investment in the platform. Once you begin to approach a critical mass of adoption, to get the most out of data driven decision making, this should be scaled across the organization. This may require training of employees, new/modified processes and ?investment in a data platform to support larger scale collection, storage, processing and visualization of data.

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Data driven decision making is essential for organizations in the information age. The competitive playing field has been leveled,? with the wide scale proliferation and ease of collecting and accessing data. The players who adopt the mindset, step into the practices and invest in the platforms,? will be the ones who come out on top and achieve success.?

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