The 3 things you need to create a data culture
I love data. I live it, I breathe it and I get excited about it. Recently, I started thinking about what creates a data culture when I read the Big Data and AI Executive Survey 2019. It said that 72% of respondents were yet to forge a data culture.
While every business uses data in some form, they don’t all use it to truly understand the dynamics of their business and make strategic decisions. Data culture is about more than looking at numbers, it’s about making data-driven decisions about strategy.
There are three things that you need to create a data culture.
1. Top-down leadership
One of my favorite quotes is by Jim Barksdale, former Netscape CEO, who said "If we have data, let’s look at data. If all we have are opinions, let’s go with mine."
The number one thing you need to create a data culture is top-down leadership. Senior management has to be willing to model behaviors around using data to make decisions. If your senior management team is simply making decisions based on their own opinions, then why should anyone else use data to make decisions?
Senior leaders in your organization need to show that every critical decision they make is based on research and data. It doesn’t matter whether the research is qualitative or data-driven, but to create a data culture you have to break the mindset that opinion is more important than data. Opinions are based on our own biases and time and time again those biases have been proven to be false. Data is a far more powerful tool to influence the business and leadership needs to show that.
2. Demand for analysis
To create a data culture, senior management needs to request analysis of the business, not just reporting. Managers need to push back on numbers that are presented to them and ask for a narrative or explanation. They need to ask questions and drive the requirement to justify everything with data. By asking for data and drilling into the numbers, managers can forge a data culture.
At Yellowfin, each department completes a data story. This is a monthly analysis of the business with a defined set of analytical questions that they must answer. They can’t simply say what happened. They have to explain why it happened and how the business is changing. This gets each function to think about their business strategically and what the data is telling them rather than just saying ‘sales went up by 10% this quarter’.
If you keep your numbers and analysis hidden, you can't build a data culture. Both the team below you and the team above you need to see your analysis. Transparency, honesty, and truth create accountability.
At Yellowfin, each function’s data stories are made available to everyone. This approach exposes a lot of issues with anecdotal management. In the past, people assumed something and it became the cultural truth, but it wasn’t the data truth. By being transparent, there's only one story and that story is in the numbers.
Transparency also means that people can understand why decisions are made. For example, we analyzed our customer churn rate and realized that we were losing deals below a certain level. So we saved a huge amount of time and effort in the business by no longer doing those deals. By showing everyone the analysis, they could understand how the decision was made and how it would optimize our business.
While you can build a data culture with these three things, you also need to make sure your team has the right tools to deliver that data culture. You need dashboards and somewhere you can build your analysis. People also need to be prompted when things change so they can be on top of their numbers and trends.
Creating a data culture is about creating an environment where data matters and is used to make strategic decisions. This has become more important as our business has got larger and more complex. To make the right decisions in a large business you have to be data-driven, and for that, you need to create a data culture.
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