Is your business data-rich but insight-poor? Organizations have abundant data on their customers, operations, communications between departments, as well as financial results. Unfortunately, most of the data sit idle and forgotten.
In order to leverage the power of data to manage the business proactively, leaders need to foster a data-driven culture. There are three steps to build a data-driven culture.
- Capture useful data
Not all data are created equal. Useful data guides decision-making. Unhelpful data generates noise that causes confusion.
To determine what data is useful, start with identifying critical business results. Theses results include financial health, operational efficiency, and customer satisfaction.
For example, the Purchasing department wants to shorten the cycle time for processing purchase requests. The critical result is cycle time from an initiation of a purchase request to the issue of a purchase order.
Once the critical business result is identified, examine the key tasks involved in the process. For this business, there are two steps. The first step is to get an approval for the purchase request. The second step is to create the purchase order. To expedite the cycle time for purchasing, it would be good to know how long it takes to get the approval and issue the purchase order.
This means that data that are useful to capture includes the duration from receiving a purchase request to getting an approval from the manager, and the duration from approval to cutting the purchase order.
Despite a natural inclination to capture as much as data as possible, it is useful data that matters. Useful data reveals what’s working and what isn’t.
- Make quality data accessible
Easily accessible data helps to encourage use. When old technologies are in place, they require effort to extract data by a programmer. The need to submit a request and potentially long wait time to get the work done deter good intentions.
Fortunately, there are numerous approaches and tools to expedite data access. It is worthwhile to invest in these tools regardless the business has old or modern technologies in place.
In addition to having data readily available, it is just as important to ensure data is of good quality. This means data is reliable, accurate, and consistent. Bad data leads to skewed results and poor conclusions.
To ensure data is of good quality, work with teams that are responsible for inputting and/or capturing data. They need to understand the importance of getting complete and consistent data into the system.
Poor data is attributable to sloppy data entry, misuse of data fields in applications, and incomplete data. Clear accountability assignment would help to educate those who are responsible for inputting data the significance of doing a proper job.
When data is unreliable, it is difficult to convince teams to use data for decision support.
- Encourage data use for decision support
Building a culture starts from the top. Leaders need to demonstrate the value of using data for decision-making.
Communicate the need to mine relevant data for insight. In meetings, prompt for data to substantiate interpretations of root cause or the value of a performance improvement idea.
The objective is to get everyone excited about conveying their findings through data illustrations. Recognize those who consistently demonstrate a data-driven mindset and incentivize others to follow.
When leaders work diligently to establish a discipline in using data, employees aren’t shy about results discussions. They are comfortable in challenging each other on what the results present. Over time, the habit forms the foundation for a data-driven culture.
These three steps require discipline to build habits and sustain momentum. When teams are adept to asking poignant questions to identify useful data for purposes of uncovering insights, it becomes second nature to tackle problems based on data. A data-driven culture positions a business well to build a coherent and aligned proactive operation.
If you like this post, you might find this helpful: How to Make Your Data Useful
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