Somewhere, you've probably come across the famous statement, often attributed to Peter Drucker: "Culture eats Strategy for breakfast." That is, a strong business culture—including employees' personal and professional behavior, attitudes, expectations, and track record—is a clearer marker for business success than are the best-laid plans (i.e., strategy).
While strategy is needed, consistency, integrity, and leadership make the bigger difference when you consider results among various companies over time.
But is it possible that a well-established culture could be the enemy when a business strives to become more data-driven?
After all, the confidence of most business leaders lies in their past successes. What happens to that confidence when they're suddenly confronted with data suggesting they move the business in a way that runs counter to their instincts? Those executives need to learn to trust the data.
You can help by building a data-based decision making culture where executives learn from experience that they should trust the data. First make sure you fully understand the culture challenge that lies ahead. Then take the steps below to build this new culture in your organization. A key lesson here: Don't be afraid to go big.
NewVantage Partners' (NVP) 2021 survey of 85 Fortune 1,000 industry-leading firms in financial services, healthcare, life sciences, and retail found that the sample organizations are universally invested in data and AI.
However, the results aren't so good. Only 24% of those businesses report that they are indeed data-driven; that's down from 38% last year. What's the problem?
In his Harvard Business Review write-up of the survey results, NVP founder Randy Bean put it this way: Some 92.2% of mainstream companies report that "they continue to struggle with cultural challenges relating to organizational alignment, business processes, change management, communication, people skill sets, and resistance or lack of understanding to enable change."
So, even though data and AI are clearly part of the strategy, is Drucker's adage about the relative power of culture just as true as ever? Maybe. But there's a different way to look at the data-driven challenge.
With the availability of data analytics, leaders no longer have to rely on gut instincts based on experience when deciding about trends to exploit. The data itself, when collected and analyzed properly, can show those things to business intelligence and data science teams, which in turn can report the findings to the corner office. It's then up to leadership to incorporate what the data shows into their business decisions.
So the issue isn't "strategy vs. culture," but rather "experience culture vs. data culture." Either way, "culture" is always part of the equation. The challenge lies in getting experienced executives to trust that the data "knows" as much, and often more, than they do.
It's not enough to show them how truly data-driven businesses such as Amazon, Netflix, and Facebook are eating their competitor's lunches. They need to see data-driven success in their own companies. So how should those who want to focus more on data drive toward positive results?
Any time an organization decides to move from an old to a new way of doing things, many folks advocate taking baby steps, moving gradually to prove that the new approach has merits.
Too frequently, that careful approach leads to failure.
Why? Because while one team gets assigned to a "safe" project—i.e., one that the business can afford to have fail if the new methods don't pan out—all the other teams continue plodding along as usual, with little interest in the success of the experimental project. The larger organization learns nothing and, worst case, a failed experiment just confirms bias against any kind of change.
Experts often suggest another approach: Choose a project that will have a big impact on the business, where stakes are high enough that success will really matter.
