Below is a recent blog post from Harvard Business Review. There are four steps to improve your organization: Improve the data; Build “data to discovery to dollars” processes; Invest in people; Strive to empower all with data. Are you a data-driven manager?
by Thomas C. Redman and David Walker
Data-driven managers, departments, and organizations have always enjoyed distinct advantages. The data-driven have crafted the best strategies, uncovered wholly new markets, and kept operational costs low. Today, advances in predictive analytics and the potential for big data portend even greater opportunity. Count us among the biggest enthusiasts for continual progress in these and related areas.
Indeed, we think every organization must develop and execute an aggressive plan to put data to work. But the vast majority readily acknowledge themselves as “data rich and information poor.” In these organizations, too few people are involved, too much data can’t be trusted, and too much data lies fallow in vast, unexamined warehouses.
So where to begin? Important as the technology and expertise may be, we find that most companies should focus first on high-quality data, process, people, and culture. Ignoring these is a bit like putting enough energy into a leap to get halfway across a stream; it takes time and money but leads to an unhappy result. We propose four interlocking steps to use your data more effectively and to create a data-driven culture in your company.
Improve the data. “Garbage in, garbage out!” It is trite to observe that results can be no better than the data on which they are based. Wall Streeters seem to have missed this point when they employed sophisticated algorithms to slice, dice, and price risk into the now infamous collateralized debt obligations, all the while forgetting (or blissfully unaware) that the data about underlying mortgages were corrupt. Make sure the data are properly, clearly, and consistently defined across the organization, improve quality, and promote sharing across units. To be clear, this is not — repeat not — an esoteric tech project. It requires concerted effort across the organization.
Build “data to discovery to dollars” processes. Create processes to put data work across the enterprise. Here we include processes to deliver more to customers; to repeatedly and forever seek hidden truths in data; and to seek out novel data and integrate them with existing data into a more potent whole.
is a terrific example. Armed with a deep understanding at the customer-level of where it makes money (not just generates revenue), a company can forge new relationships, change its price structure, and redirect its marketing campaigns. The technical challenges are legion. But they are nothing compared to the challenges of defining and managing the processes to link data from (disparate) cost and revenue centers, conduct the analyses, and renegotiate contracts.
Invest in people. Obviously, the high-powered analytics types are in short supply. But we’re even more concerned about managers who are accustomed to managing by the seats of their pants (and pantsuits) and threatened by data. Their new roles are essential, but they cannot execute without wholly different mindsets. The McKinsey report on Big Data suggests theU.S. alone faces a shortage of roughly ten analytically-competent managers for each deep analyst. Start by gathering a critical mass of these managers.
Strive to empower all with data. Drive data into every nook and cranny of the organization, show people how data make them more effective, and encourage experimentation. As they “switch on” (albeit slowly), most people make better, more confident decisions; seek opportunities to improve their work; and engage with others on larger, more complex issues.
This last point is driven home over and over. Take this example: One night Tom attended a celebration for a team in a telecommunications company that had drastically improved performance after implementing a new data quality measurement and control system. He asked one woman how the new measurements had impacted her work.
She looked him and said, “You know, before we had these measurements I never had any say in my work. We’d run into a problem, and I’d ask my boss how he wanted me to handle it. And he’d tell me. A lot of times the answer didn’t make sense. But I did what I was told.”
The excitement in her voice rose as she continued: “Now I have the facts. I still go to my boss. But now we discuss those facts. And he lets me do what I think is right. I’ve never had so much control in my work.”
Later that night Tom ran into her boss and asked the same question. He replied, “I always felt like my life was nothing but dealing with problems. People would come to me all day long and ask me how I wanted them to handle something. How the heck was I supposed to know? But there I was. Telling people what to do.”
He continued, “People still come to me with problems. But it’s different now. We figure it out. Together.”
A more capable team quite naturally produces better results. As a data-driven culture permeates more broadly, an enterprise’s abilities to take bold, innovative, concerted action on increasingly larger challenges also grow. This is critical. The really important challenges facing today’s organizations are enormous, multifaceted hydras. They will not yield to data alone. But the deeper, the broader, the more pervasive your data-driven culture, the better your chances.
- Make Data Work Throughout Your Organization (blogs.hbr.org)