Data analytics is going to be a requirement rather than a differentiator in the very near future. Data-driven marketing through eight steps prepare organisations for accessing and integrating data to make informed, proactive decisions.
Why Building a Data-Driven Culture?
Today’s business leaders face an environment that requires real-time decisions and accurate, reliable and timely data. The amount of data and the ability to change that data into action is at a phenomenal level right now. Consequently, leaders face a growing need to gather, analyse and monitor more data than ever before. In other words, analytics is going to be a requirement rather than a differentiator in the very near future.
In a data-driven business environment, everything must be measured keeping the goal in focus and continue towards that goal. Once we have defined a set of goals and metrics, we can now start making data-driven decisions based on valid data as opposed to sales managers creating their own metric.
Eight Steps for Data-Driven Marketing Success
Mills (2011) has developed eight steps addressing how school districts can use data management, reporting and analysis to improve efficiency, performance and student outcomes. However, integrating advice from Kotter (2007) and Schrage (2014), this framework is applicable to most organisations.
1. Establish a Clear Vision
Establishing a clear vision is critical to bringing about a culture focused on data and results. This requires strategies for achieving that vision. For instance, leaders may create a sense of urgency by examining market and competitive realities, as well as by identifying crises, potential crises, or major opportunities.
2. Research and Learn from Others’ Successes
Once the vision is established and communicated, it is important to learn from similar organisations or departments that have successfully made the transition to being data-driven. Moreover, it is important to plan for and create short-term wins, visible performance improvements and reward employees involved in the improvements.
3. Examine Infrastructure for Effective Data Use
With the continued emphasis on using technology to maximize efficiency, it is critical to form a powerful guiding coalition of technology leaders. Hence, a group of experts is assembled with enough power to lead the change effort. Centralizing data allows for constant updates, keeping data fresh, but leaders should also address the threat of information overload through simplification and focus.
4. Ensure Buy-In, Commitment and Trust
Involving others in the vision and process is important due to the impact that the momentum from large numbers of staff can have on the outcome. A key step in the culture change will be to reinforce trust among staff through collaboration regarding specific steps in the process, desired outcomes and methods for implementing the change process.
5. Foster Professional Development
Professional development, rather than simple training, is an ongoing process that involves gathering and increasing knowledge as much as specific skills. The staff needs consistent access to development resources to build a strong foundation of comfort with the new culture. For instance, teaching new behaviors may happen by the example of the guiding coalition.
6. Lead by Example and Encourage Data Utilization
While most are familiar with the old saying “walk the walk and talk the talk,” leaders need to implement the practices that mirror and extend the shift toward a data-driven culture. This sends a powerful message of its urgency to stakeholders. Moreover, by choosing a limited number of data indicators and analytic tools for staff to focus on and implement into their daily work, they are not overwhelmed by the massive amounts of data available.
7. Establish Data Meetings
A way to ensure active participation is to have the leaders come to the meetings prepared with data to discuss performance and what strategies they are putting in place to address any issues that have surfaced. Real-life stories from staff are a powerful means of showing positive outcomes.
8. Remove or Modify Barriers to Effective Data Use
Are there obstacles in place that prevent the shift in culture? Getting rid of obstacles to change and changing systems or structures that seriously undermine the vision is important. Moreover, leaders may need to encourage risk taking and nontraditional ideas, activities, and actions.
Unless data is communicated across the organisation, it becomes worthless. Beginning with a clear vision that is communicated to all stakeholders and building momentum via trust and commitment requires leaders who recognize the importance of facilitating buy-in among staff, learning from others’ successes, and providing professional development and collaborative meetings that reinforce goals and respond to issues. Moreover, leading the vision to reality requires technical preparation that removes barriers to effective data usage and ensures a sound IT infrastructure. Putting data and data-driven leadership to use in conversations, meetings and interactions sends the message that this approach is valued and expected.
Based on conversations with participants of executive programs and reviews of a number of cases on digital transformation, Káganer, Zamora and Sieber (2013) recognise five keys to a digital mindset:
1. Provide vision while empowering others
Leaders need to cast the vision for how the company should evolve, while at the same time providing an environment in which employees are safe to experiment with their ideas, and where learnings are systematically captured, analysed and acted upon.
2. Give up control while designing choice architecture
Nudge theory suggests that positive reinforcement and indirect suggestions are at least as effective – if not more effective – than rigid rules or enforcement as to influencing motives, incentives and decision making of groups and individuals. For instance, by making the desired option the default choice, people have to opt out of doing something instead of affirmatively choosing to opt in.
3. Sustain while disrupting capabilities
Existing capabilities must be sustained to provide a foundation for the future and facilitate a sense of stability, whereas new capabilities need to be shielded because they tend to be vulnerable to traditional evaluation criteria.
4. Rely on data while trusting your intuition
Data is key when decision-making and should guide a reasoned conversation based on facts and experimental measurements. Yet, intuition helps leaders to formulate hypotheses and define assumptions to decide which data types and resources to focus on, and how to combine, analyse and interpret them.
5. Be sceptical while being open-minded
Willingness to consider new ideas is a good trait that facilitates active sense-making and forming new meanings of what technology affords us to do across contexts and experiences. However, this does not imply accepting every new perspective as the best way of doing things. Rather, we take it as an experiment.
Káganer, E., Zamora, J. L., & Sieber, S. (2013). 5 Skills Every Leader Needs to Succeed in the Digital World. IESE Insight.
Kotter, J. P. (2007). Leading change: Why transformation efforts fail. IEEE Engineering Management Review, (37).
Mills, L. (2011). Creating a Data-Driven Culture: Leadership Matters. SAS Institute. Retrieved 8 April 2015 from: www.sas.com/resources
Schrage, M. (2014). Embedding Analytics for Growth: Creating a Data-Driven Culture. Harvard Business Review webinar. Retrieved 8 April 2015 from: https://hbr.org/2014/12/embedding-analytics-for-growth-creating-a-data-driven-culture