The ability to make decisions is the hallmark of a leader. But, according to leadership expert Larina Kase, author of “The Confident Leader,” the ability to make consistent, exceptional decisions is the hallmark of a great leader. As more and more businesses correlate relevant customer, market, operational, and financial data, the ability to use this data in an actionable way is becoming more paramount to survive in a competitive landscape. Data Driven Decision making, or “DDD” as it is commonly known in academic circles, is the term commonly used for a company having the ability to rely on their data analytics for making decisions. The following steps will help your company begin to turn your mound of useless data into a powerful asset.
1. Set up a foundation that allows your company to collect and analyze data:
Data collection needs to be done so that the data is in an organized, usable fashion—specifically, the collection, processing, and storage of data. Ideally, this data infrastructure should be set up and maintained by a team of experienced data engineers. Data collection that is done haphazardly can almost be more trouble than not collecting data in the first place. If you make a misstep here, suddenly, you have a pile of potentially valuable data on your hands that will take a lot of time, effort, and money to turn into something that can produce any meaningful insight. If your data collection, processing, and storage is set up right the first time then you will save countless frustrating hours trying to make sense of your data. With that said, it is just as important to ensure your data is modeled for data mining initiatives. Most software applications design data models with only data entry in mind. A data warehouse design is quite different but much more efficient at measuring key performance indicators.
2. Make sure your culture is comfortable with data:
Your leadership team does not need to consist of data scientists, mathematicians, and statisticians, but they should have a certain level of comfort seeing data sets, models, and graphical representations of data. If your team is currently lacking this comfort, training your employees to have more familiarity with data may be necessary.
As a business leader, it’s your job to make sure that your organization is data literate. In addition, it’s important that your leadership team can make business cases from data while crafting compelling stories. If your business leaders need some refining in this area please see the following article from Harvard Business School.
3. Remember that data is a story:
Like any good story, data can be an incredibly powerful change agent. Likewise, data can be inaccurate, biased, manipulated, or misinterpreted. In other words, data in and of itself is not the end all be all. It is important to look at your data with a critical eye and to be able to see the underlying assumptions of the analytics.
Many times, data can be straightforward. Take the local weather. There is not a lot of guesswork there. With that said, there are still a few assumptions you can come away with. You are assuming that the devices set up to collect the weather data are calibrated correctly. Also, you are assuming that where they are collecting the data is representative of the location reported. If a weather station is set up in an urban heat island, the reading may be warmer than the surrounding rural areas.
Once you have outlined any assumptions, it is easier to get at the full story the data is conveying.
From a technology perspective, perhaps the best way to ensure that data metrics are accurate is to work with your IT team to create data sets and documentation for each metric within. Once a data set is created, it should be “certified” by business users. Rather than creating new queries for each new report, these data sets can be leveraged over and over for different uses.
4. Analyze the data, but don’t forget to trust your gut:
Ultimately, you as the business leader have a much more intimate knowledge of the customer, the product, and the organization than a set of numbers in a spread sheet. As the business leader, it is important that you strike a healthy balance between data and intuition when utilizing data. Following data blindly can quickly lead you astray if the data does not make sense based on the realities of the business. A pitfall just as dangerous though, is letting your preconceived notions get in the way of the reality of the data. Sometimes, the proof really is in the pudding.
According to Inc. magazine, one of the reasons companies like, Amazon, Google, Facebook, and Spotify are industry leaders is how they leverage their data. Although this may seem daunting, there are some great business intelligence tools like PowerBi and Tableau that may make it simpler than you think to use data and analytics in actionable ways.
If you can implement the above steps, your company can begin to take advantage of your data. To remain competitive, take the first steps today to guide your company’s data collection and transform it into a powerful decision-making tool.
Sources:
https://hbr.org/2017/06/the-best-approach-to-decision-making-combines-data-and-managers-expertise
https://hbr.org/2017/06/3-things-are-holding-back-your-analytics-and-technology-isnt-one-of-them
https://hbr.org/2016/02/the-rise-of-data-driven-decision-making-is-real-but-uneven
https://hbr.org/2013/04/the-hidden-biases-in-big-data
https://www.datanami.com/2016/01/08/beware-of-bias-in-big-data-feds-warn/
https://gbr.pepperdine.edu/2010/10/great-leaders-are-great-decision-makers/
https://hbr.org/2015/12/how-content-marketers-can-tell-better-stories-with-data
https://www.nationalgeographic.org/encyclopedia/urban-heat-island/
Tweet us @InfoWorksTN to join the conversation!
