A data-driven business environment may sound cut and dry, but it can have a strong, positive impact on your bottom line. Today, we’ll share what it takes to create a data-driven culture, and the impacts businesses see from using data to lead the way.
Charlie Brown Could Have Used More Data…
Poor Charlie Brown. Our little Peanuts friend was wracked with insecurities and wanted nothing more than to fit in with the other kids. His constant humiliation resulted from his inability to collect data from the world around him. Had we been friends, we could have told him… all he needed was a little more data in his life.
How To Create A Data-Driven Culture
Many pieces come into play when creating a data-driven environment. It’s easy to decide to make your company more data-friendly; after all, a data-driven business gets 5-8 times the ROI compared to a non-data-driven one.
One of the first steps to maintaining a data-driven business is implementing a solid, repeatable process for gathering, optimizing, and storing your data. If your system is haphazard, you risk any number of things going wrong: overlooking important data, improper integration, and unreliable metrics. So be sure to set up a system that is precise and able to be replicated each time!
It’s also essential to set your goal ahead of time. Before you begin collecting data, determine precisely what you intend to use it for; this will focus your search and streamline the entire process. Then get yourself a strong analytics team so they can take the next steps.
If Charlie Brown had set a goal for himself of collecting data about Lucy’s football game with him, he would have been able to concentrate only on how many times she pulled the ball away from him, and how many times she allowed him to kick it. Instead, the poor blockhead didn’t collect that data and analyze it.
Another critical component of creating a data-rich culture is to democratize your data. It should be accessible to the people who will be using it, or anybody who can benefit from it. Data must be easy to locate, not hidden away in a silo where only a select few even know it exists. You also need to provide your employees with the tools that the average person can operate.
And, of course, you need to train those employees how to read the data and also to understand its significance. A data-driven environment can’t exist if it doesn’t get buy-in from everybody concerned. Your staff must embrace the data-driven culture for it to work.
The Impact of Being Data-Driven
A data-driven business culture doesn’t just mean that you’ll be able to make smarter business choices, although yes, that, too. Leaning into a data culture means that nearly all areas of your business will be affected. Here is just a sampling of some of the direct impacts that becoming data-driven will have on your organization.
Analytics can point out which of your employees’ efforts work vs. the ones that don’t. Why should an employee waste time working on a task that the metrics show doesn’t pay off for your business? For example, if one of your employee’s tasks is to monitor your company’s Twitter feed, but there’s never any activity there, that task should be dropped from their rotation.
Being data-driven helps a company to evaluate strategies for wise use of time. When you improve employees’ time management, you can adjust their focus accordingly and increase their productivity. This translates to profits; a data-driven company is 19 times more profitable than one that isn’t, according to McKinsey.
When you democratize your data, you’ll naturally find that your company’s teams enjoy better communication. Everybody has access to the same metrics, so it’s clear where everybody stands. In other words, you end up with a shared language and an equal starting point for all. No single team knows more than the other.
Equal access to data equates to better teamwork, and that’s invaluable for running any organization. Forrester found that data-driven companies grow approximately 30% each year. You can’t have a growing company without every part of the business working well together.
It’s frustrating when you feel that you’re held back from being successful in your role because you aren’t being properly supported, which can quickly lead to employee disengagement. “Well, I can’t do my work properly, so why should I even try?” And disengaged employees cost your company money.
When your employees have access to all the metrics and tools that are helpful in their role, they’re more likely to remain invested in their job. They feel supported and feel effective at their job, and that boosts their productivity. It’s a win-win all around.
Analytics and actionable insight can reveal what your customers need and want. When they are data-driven, companies can meet their customers’ needs better, based on surveys, feedback, reviews, and buying habits. Implementing analytics gives you a 52% better understanding of your customers.
When you understand your customers well you can give them what they want and avoid giving them something they aren’t interested in. McKinsey found that businesses that are data-driven have a 23 times greater chance of landing new customers and are 6 times more likely to keep them. How’s that for customer loyalty?
A company can quickly identify approaches that work and don’t work when they lean heavily on analytics to guide their operations. They have a 69% chance of making more strategic decisions when they’re data-driven.
The metrics show them what they can rework for improvement or need to ditch altogether. A business can more easily pinpoint where in the process their strategy is failing, and pivot.
Sometimes an organization will need to make a company-wide shift to avoid entire approaches that aren’t supported by their data. For example, a company may be able to tell ahead of time if their customers are lukewarm on a product idea, and wouldn’t bother rolling it out if it wouldn’t be well received.
On the other hand, a company’s analytics may help find new opportunities, showing them what’s in demand from their customers.
Creating a Data-Driven Environment Impacts Your Entire Company
Changing your approach to become data-driven has far-reaching implications for your entire organization. It can improve your employee’s work experiences, your customers’ satisfaction, productivity, profits, and overall decision-making. You can’t just decide to become a data-driven business and flip a switch to make it happen. It could also have improved Charlie Brown’s social life.
It’s a process that requires time and attention, but the effort to alter your company’s approach to business will pay off in the end.