Why Do You Need A Data-Driven Culture?

It has become more than a buzzword and you should be paying attention


A report released last year by the Aberdeen Group, ‘The Executive’s Guide to Effective Analytics,’ revealed that data-driven organizations experience a 27% year-on-year increase in revenue, compared to 7% for other organizations. Furthermore, 83% saw their process cycle times improve, whereas just 39% of organizations that weren’t classified as data driven bettered their's, and 12% cut their operating expenses from the prior year, compared to 1% of other organizations.

We are in an age in which all processes are driven by technology, and companies are consuming and generating data at accelerating rates and exponentially increasing quantities. If they are not leveraging this data for actionable insights, they are losing their competitive edge to a firm that is using it. In order to truly see the benefits though, it is not simply a case of buying a bit of software that will churn out insights, or even hiring in people with the requisite skills to make sense of it, it takes a whole shift in company culture. It needs the whole organization - every team and every individual - to be taking it into consideration at all times, for everybody to be collecting it, looking for insights, and using it in their decision making processes.

By focusing on fact-based insights, the number of arguments within teams and among different C-suite executives are decreased, and there is less of a reliance on ‘gut instinct’ - the fairly nebulous concept that traditionally drove both decisions and disagreements. A study by MIT Sloan Management Review and SAS ‘The Analytics Mandate’ concluded that an ‘analytics culture’ is the driving factor in achieving competitive advantage from data. David Kiron, executive editor for MIT Sloan Management Review, noted of the study’s discoveries that: ’We found that in companies with a strong analytics culture, decision-making norms include the use of analytics, even if the results challenge views held by senior management. This differentiates those companies from others, where often management experience overrides insights from data.’

A data-driven culture empowers everybody in the organization, regardless of their experience, to bring their ideas to the table, so long as they are supported by the data. By encouraging everybody in the company to share their insights, the floor is opened to a far wider range of people, which drives innovation. This also improves staff morale, with employees considering themselves more valued as their ideas take on a higher importance.

There are a number of other ways that data can be of benefit. It is useful in identifying waste and unnecessary processes, which means that costs can be cut appropriately. By making fact-based decisions, risk is also hugely lessened and there is a far more knowledge around the likely outcome. You can also know and serve your customers better. Alignment between internal operating effectiveness and external customer experience is made possible, and information can be shared across an organization that helps to get everybody on the same page when it comes to what the customer wants.

There are a number of challenges to implementing a data-driven culture. C-suite executives could perceive it as a threat to their power, for a start. Its development needs somebody in place who will really drive it forward, and make sure that everybody adapts their working practises, which they may have held for years. However, while it may be a challenge, it is certainly one worth overcoming to stay ahead of the competition.


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