A closer look at characteristics of being a data-driven organization and its impact on decision-making
By: Cynthia Short
What does being data-driven really look like? In our last Data-Driven Organizations series video, Lexico lead advisor Dan Mishich and I broke down the meaning of data-driven organizations and why it is important for business leaders to make this critical transformation to data-driven strategy and data-driven decisions. But how does being data-driven translate to the everyday actions of an organization and what are the outcomes?
In this video, Characteristics & Decision-Making, Dan and I take a closer look at the key characteristics of being data-driven and discuss the impact it has on decision-making. In addition, we go a step further and discuss the topic of data democratization and the importance of empowering all individuals in an organization with access to data.
Looking for guidance on how to become a data-driven organization? Contact Lexico.
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Data-driven Organization Design & Characteristics Summary
The Key Characteristic of Being Data-Driven: View Data as an Asset
In today’s data-driven world, where information is abundant and valuable, organizations face the challenge of effectively managing and utilizing their data. Surprisingly, many companies fail to treat data as they would any other valuable asset within their organization, such as real estate. This raises an important question: Why is data often overlooked as an asset?
Data has tremendous potential to drive insights, inform decision-making, and unlock new opportunities. However, a lack of awareness and understanding often leads to data being underutilized or mismanaged. Many organizations view data as a means to an end, a tool to get the job done on a daily basis. While this may provide short-term convenience, it fails to recognize the long-term value and significance of data.
One of the primary reasons for this oversight is the absence of proper disciplines and frameworks surrounding data management. Unlike real estate, which is subjected to meticulous planning, governance, maintenance, and utilization, data is often left unattended. Organizations fail to realize the importance of data integrity until they attempt to leverage it for decision-making purposes. This is particularly evident in the struggle to maintain a comprehensive, single-source view of customer data, a crucial aspect of running and operating businesses effectively.
Interestingly, data often becomes an afterthought in technology implementations. The focus is primarily on the technology itself, with little consideration given to the input, output, and overall utilization of data. It is only in hindsight that organizations realize the missed opportunities and the need for strategic planning and intentional design.
Truly data-driven organizations exhibit a key characteristic: integrating data into their strategic conversations and planning from the outset. They recognize that data is not an isolated component but an integral part of their overall strategy. By incorporating data discussions early on, these organizations avoid the need for retroactive adjustments and maximize the value they can derive from their data assets.
For companies to truly embrace a data-driven approach, it is essential to view data as an asset. Just like any other valuable asset, data requires careful management, protection, and intentional planning. By recognizing the significance of data and incorporating it into strategic conversations, organizations can unlock the full potential of their data assets and drive success in today’s data-centric landscape.
Follow Through with the Data-Driven Process: Understand & Optimizations
In the age of data, organizations are increasingly recognizing the importance of leveraging information to drive better insights, informed decision-making, and overall business success. However, achieving true value from data requires more than just collecting and reporting on it. It necessitates a comprehensive understanding of the entire data value chain and a commitment to optimization at every stage.
The data value chain encompasses various steps, from data collection and understanding to reporting and analysis. While many organizations may stop at generating reports, the real value lies in moving beyond mere reporting and delving into deep analysis that can shape actions and drive meaningful outcomes. This is where the true potential of data is realized.
To optimize the data-driven process, organizations must recognize the cyclical nature of data utilization. Data is not a one-time resource; it is an ongoing tool that informs decision-making, fosters innovation, and capitalizes on market opportunities. Once decisions are made based on data insights, it is crucial to put those decisions into action and monitor their outcomes. This feedback loop allows organizations to evaluate the effectiveness of their decisions and adjust their strategies accordingly.
It is important to note that data does not always have to be perfect. Striving for perfection can lead to diminishing returns and unnecessary delays. Sometimes, good enough data can provide the necessary information to make informed decisions and drive positive results. The key lies in making the best decisions possible based on the available data points and measuring the outcomes for continuous improvement.
The data-driven process requires a commitment to ongoing optimization and a willingness to adapt as new insights emerge. It is not a linear path but a continuous cycle of data collection, analysis, decision-making, implementation, and evaluation. By embracing this iterative approach, organizations can harness the true power of data and drive meaningful outcomes.
Organizations must follow through with the data-driven process to maximize the value of their data assets. By understanding the entire data value chain and embracing optimizations at every stage, organizations can unlock the full potential of their data and make informed decisions that drive success. Embracing the cyclical nature of data utilization and focusing on making the best decisions possible based on available insights are crucial steps towards achieving data-driven excellence.
Empower Everyone with the Data-Driven Decision Making
The power of data lies in the hands of individuals who can harness its potential and translate it into actionable insights. A crucial aspect of data-driven organizations is empowering employees at all levels with full access to data. Gone are the days of tightly guarded data warehouses and restricted access to information. The goal now is to enable every individual who needs data to make informed decisions and contribute to the organization’s success.
Traditionally, there has been a fear of granting unrestricted access to data. Organizations worried that individuals might misinterpret or misuse the data, leading to detrimental outcomes. However, as we progress further into the data-driven era, that fear has diminished. We now understand that empowering employees with data fosters a culture of transparency, accountability, and innovation.
One of the primary objectives of becoming a data-driven organization is to improve decision-making. However, merely storing data in walled-off repositories and granting access to a select few does not align with this objective. True data-driven organizations aim to democratize data by ensuring that everyone who needs relevant information has access to it. This inclusivity allows employees across departments and levels to make data-informed decisions, driving positive outcomes for the organization as a whole.
It’s essential to recognize that building a data-driven culture requires a shift in behaviors and a deeper understanding of how data can inform decision-making. Merely optimizing the data value chain and investing in data infrastructure is not enough. The real transformation happens when individuals throughout the organization embrace data as an enabler and an asset.
To fully unlock the potential of data, accessibility is key. It doesn’t matter how comprehensive or perfect the data is if it remains inaccessible to those who need it. Employees must be equipped with the necessary skills and tools to extract insights from data and use them to make informed decisions. This shift from relying on past performance metrics to leveraging data-driven insights is where the true power of data emerges.
However, empowering everyone with data is not without its challenges. It requires significant effort and a cultural shift within the organization. It necessitates change management, training programs, and a commitment to continuous learning. Organizations must invest in creating a data-driven mindset and provide resources that enable employees to navigate the world of data confidently.
The Ultimate Data-Driven Decision Approach
The path to becoming a data-driven organization involves empowering individuals at all levels with access to data. It goes beyond optimizing the data value chain and requires a cultural transformation that embraces data as an enabler. By democratizing data and fostering a data-driven decision-making culture, organizations can unleash the full potential of their data assets and drive meaningful outcomes. The journey may be challenging, but the rewards of empowering everyone with data are immeasurable.
We invite you to share your experiences and insights regarding the journey of building a truly data-driven company and team. Your firsthand encounters with data-driven transformations within organizations, or even within your own company, can provide valuable perspectives on the challenges and successes of embracing a data-driven approach.