The Three Essential Elements of a Data-Driven Culture

How to Propel Your Business Forward with a Data-Driven Culture

Jodi JohnsonAugust 1, 2018

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The concept of “data-driven” organizations entered the business lexicon about the same time as “big data” became the buzziest of buzz words. It has only been in the last few years, however, that creating a data-driven culture has been widely recognized as a potent strategy for driving growth, profitability, and competitive advantage. In the 2018 NewVantage Partners survey of senior business executives (56% of which were Chief Data Officers), for example, a whopping 99% of respondents reported that they were trying to create a data-driven culture.

That’s why it’s a safe bet to predict that the most successful businesses of tomorrow will all be data-driven organizations. After all, today’s top companies—like Amazon, Google and Facebook—all have data to thank in large part for their dominance, profitability, and continued ability to innovate. Brand leaders like Disney and Zappos have likewise leveraged data analytics to create a world-class customer experience to drive revenue. Yet while most companies would strive to create a data-focused organization, many have fallen far short of that goal. The NewVantage Partners survey that revealed nearly unanimous interest in building a data-driven organization also found that only 32% were successful in their efforts. Apparently it’s easier said than done.

So what, exactly, does it mean to be a data-driven business? And how do you build a culture that’s driven by data? Let’s take a look at what data-driven organizations can achieve, the crucial characteristics of a data-centric culture, and the critical data management components that can help to build it.

Defining “Data Driven”

A data-driven organization is one that recognizes data as a critical business asset, and empowers employees at every level with the access, knowledge and tools they need to turn that data into actionable insights and impactful business intelligence. Data-driven companies understand that data will increasingly provide the keys to competitive differentiation, and therefore invest in solutions and enact strategies and processes to enable fast and facile data analysis.

Data-driven organizations take every opportunity to leverage their data resources through agile data management and analytics, including machine learning, AI, and deep learning. Some companies might be tempted to employ a team of highly skilled data scientists and IT pros to advance their data goals, but this strategy alone is a recipe for failure. While these experts are certainly more than capable of wielding the data tech to enable analysis, they do little to build an enterprise-wide culture of data.

Crafting a Culture of Data

Changing a company’s culture, in any way, takes time and effort. Success won’t happen without executives leading by example, and even then the culture will need to grow organically from within the ranks of employees. That’s the real irony about creating a data-driven culture in particular: it must begin with the approval and advocacy of top executives, but it also must be built from the ground up—which takes a continued and concerted effort from stakeholders across the organization. So how do you begin?

First, leadership must demonstrate a commitment to change, beginning with the establishment of a data committee or appointment of data leaders such as a Chief Data Officer (CDO). Next, the organization must undertake an organized and ongoing campaign to communicate the importance of data across the enterprise, and explain the benefits that embracing a data-driven culture can provide.  And finally, the company needs to put its money where its mouth is, as they say, by demonstrating that commitment through action. Leadership needs to approve and allocate appropriate budget, resources and support for data initiatives, and implement data strategies and solutions that can empower employees and inject a data-centric mindset into organizational DNA.

The Three Essentials of a Data-Driven Culture

1.  Promote the Democratization of Data

To create a culture focused on anything, the first thing you need is engagement. If employees don’t embrace the culture you’re promoting, it doesn’t matter if you declare it a part of your core values or memorialize it in a mission statement. Employees need to believe in the culture you’re trying to foster, and the best way to do that is to stir their passion through empowerment. So the first step is to democratize your data—make it readily available, understandable, and transparent across the organization.

Efforts to create a data-driven culture should be business-centric. After all, business is recognized as the main consumers of data, and business operations are best positioned to identify challenges, discover opportunities to increase efficiencies and decrease costs, and detect new ways to innovate. A data-driven culture begins by putting those business users in the driver’s seat, and furnishing them with the tools to quickly and easily extract meaningful insights from data.

2.  Ensure Data Quality

You can’t have a culture driven by data if your data isn’t broadly viewed as consistent, accurate, and reliable; it’s the rough equivalent of trying to promote a value-driven culture in a company filled with liars, cheaters and abusers. If you seek to be a data-driven culture, then you must prioritize and promote your efforts to ensure the quality of your data assets, regardless of source. If your data isn’t viewed as dependable, then data sets and the results of analysis will both be viewed with suspicion. Data utilization will be suppressed, and insights won’t be relied upon. And you can’t be a data-driven organization if no one trusts your data.

Implementing rigorous data quality validations, including data profiling, completeness, timeliness, reconciliation/balancing and value conformity can build users’ confidence in your data and ensure data quality. Ongoing monitoring and data scorecards can ensure continued adherence to high quality standards, and even aid in the monetization of data assets. All of which reinforce a data-driven business.

3.  Data Governance

Data governance is absolutely critical to creating a data-driven culture. Data consumers across an organization won’t be empowered unless you’ve promoted and provided widespread data literacy—and that simply can’t happen unless you’ve implemented data governance. Data literacy comes from things like business glossary, data dictionaries, data lineage, data catalogs, and metadata management—all of the tools that teach data consumers where data comes from, where it resides, what it means, associated business terms and attributes, and how it’s used.

Beyond data literacy, data governance also establishes the policies and processes around data assets, as well as ownership and responsibility. Governance provides workflows for many things, including adding new terms, assigning ownership, managing usage and approvals, and handling inquiries and issues resolution.  Any organization that strives to be data driven should begin with a foundation of data governance.

The Benefits of a Data-Driven Culture

There are few risks and plenty of rewards awaiting companies that invest in becoming a data-driven organization. From increased collaboration, to improved accountability, to a greater ROI on data assets—there is little downside to this goal. And in an increasingly competitive marketplace, those companies that do not prioritize data and analytics may quickly find themselves obsolete. Or so I imagine the data would tell us.

To start creating a data-driven culture, one must begin with one of the steps identified above. Check out this white paper that speaks to the process of implementing a data governance framework that also includes data quality and the democratization of data.

To learn more about how data governance can help drive a data-driven culture, download the white paper below.

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