Data literacy for leaders

What is synthetic data — and how can it help you?

Leaders need to understand data enough to make their best decisions, drive literacy throughout the organization, and create a culture of trust in data.

Data scientists might be in demand, but data literacy starts with leaders. Leaders need to trust and understand data well enough to make good decisions, and they must also drive literacy efforts throughout the organization and create a culture of trust in data.  

Data literacy — the ability to work with and understand data to drive business impact — “is as essential a skill as negotiation, communication, management, people management, all of that,” said Piyanka Jain, president and CEO of Aryng, a data science consulting company. Executives need to lead with numbers to gain competitive advantage, she said. “Your competitors are.”

Historically, business school programs have offered courses on data modeling, querying, and architecture, but rarely look at broader data strategy, said Barbara Wixom, a principal research scientist at the MIT Center for Information Systems Research. “Leaders have to understand and appreciate that void, because it puts even more pressure on them to be literate and drive literacy in their organizations,” she said.

Here’s what leaders need to know about data literacy — from how to establish trust to being appropriately skeptical — and steps to getting there.

Modern leadership skills include trusting in data to guide decisions and knowing when to question results.

Trusting in data can be difficult for leaders, Jain said, because they are good at decision-making but often rely on their intuition. Asking someone to give away some power and accept guidance from analytics is hard. But pairing judgment and intuition with insights from data makes leaders stronger.

Leaders aren’t necessarily involved in creating or analyzing data, but they often make decisions based on analytics. “The goal for a leader, from a data literacy perspective, should be, ‘How can I be a fast but effective consumer of analysis that is produced by my organization?’” said MIT Sloan professor of the practice

formerly a  senior vice president at Salesforce. Leaders also are responsible for establishing data literacy in their organizations. The goal for a leader, from a data literacy perspective, should be, ‘How can I be a fast but effective consumer of analysis that is produced by my organization?’ Important steps include defining what data literacy means for your company and for different roles, establishing a baseline of data literacy skills; building a culture of curiosity around using data, and defining success. (For more details, see “How to build data literacy in your company.”) It’s also important to establish purposeful data vocabulary beyond buzzwords, Wixom said. Data literacy requires “top leaders committing to not just really learning the language but then using the language in understandable, consumable ways so that everyone across the organization will get on board,” she said. Wixom said her research has found that it’s particularly important to distinguish between data and a data asset, which has been purposely prepared for future value creation. Data literacy requires hands-on, ongoing effort. It’s not a matter of completing one training session, Jain said — it’s a fundamental shift in thinking.  Changing how leaders make decisions takes time. But it’s faster and easier with a systematic approach.  “If you think about data literacy as training and a checkbox, you will waste your time and your money, and you will waste the time of your organization,” Jain said.