The Four Key Pillars To Fostering A Data-Driven Culture

Today, most organizations are striving to tap into the potential value that comes from being more data-driven. For example, research by MIT professor Erik Brynjolfsson found companies that embrace data-driven decision making have output and productivity that is 5-6% higher . Richard Joyce, Senior Analyst at Forrester stated, “For a typical Fortune 1000 company, just a 10% increase in data accessibility will result in more than $65 million additional net income .” Forrester also estimates data-driven businesses are growing at an average of more than 30% annually .

Despite the many benefits that data offers, cultivating a data-driven culture hasn’t been easy. Recently, NewVantage Partners published a study that showed companies are failing in their efforts to become more data-driven. The report revealed 72% of the survey participants—primarily C-level executives (97.5%)—stated their organizations hadn’t yet forged a data culture. In addition, the percent of respondents that indicated they had “created a data-driven organization” decreased to 31% in 2019 from 32.4% in 2018 and 37.1% in 2017. Rather than seeing an increase in the number of data-driven companies over the past three years, the study showed a 16.4% drop from 2017 to 2019. Instead of seeing greater digital transformation, we’re seeing a disappointing digital regression.

If you’re wondering how data-driven your organization is, it may be helpful to compare your company’s data usage to that of your own smartphone usage. Today, most people will be distraught if they lose their phones for an extended period of time. Most of us don’t realize how dependent we are on these devices (and their apps) until they’re broken or lost. Similarly, when it comes to your data, what if your team lost access to it for a full day? How about an entire week? If you were to rate your organization’s reaction, where would it fall on the following scale?
Data-detached or data-driven: Where does your company fall on this scale if it lost access to its data?

If your company lands on the left side of the scale, you’re more data-detached than data-driven. It doesn’t mean you don’t have data or don’t use it regularly, but it’s not essential to how you operate. Today, most firms–large and small–have a bounty of data, but its presence doesn’t mean it’s actively relied on for decision making. Only when losing access to your data becomes disruptive or painful has it become an essential part of your daily processes.

If you don’t have a data-driven culture, what can you do to foster one? Unfortunately, despite all of the marketing materials to the contrary, a data-driven culture can’t be purchased or manufactured—it must be nurtured and developed. This may come as a disappointment to many executives who hoped technology could help them catch up to their more data-savvy competitors. While having the right technology is important, it isn’t the area where companies struggle the most. The aforementioned study showed the main challenges to becoming data-driven were people (62.5%) and process (30.0%)—not technology (only 7.5%). This data reinforces the need to take a more holistic approach to nurturing a data-driven culture.

If you want to foster a data-centric environment that constantly leans on data to enhance efficiency and effectiveness, you’ll want to focus on the following four pillars:

The four pillars of a data-driven culture.
Brent Dykes
1. Shift the MINDSET
One of the hardest challenges is to shift the collective mindset of your people to embrace data. You’ll need to be both diligent and patient as you attempt to steer your team in a new direction.