Today, most business leaders would like to see data used pervasively throughout their organizations. While companies are collecting lots of data across their businesses, it can often remain in the periphery and mostly as untapped potential. When you see the success that data-savvy companies such as Google, Facebook, and Amazon have achieved, you may wonder how your organization can replicate similar gains from its data. Central to the success of these tech giants has been their ability to establish and cultivate data-driven cultures. A data-driven culture can be defined as an operating environment that seeks to leverage data whenever and wherever possible to enhance business efficiency and effectiveness.
While we wish there was a simple recipe for creating a data-driven culture, there isn’t one. Becoming a data-driven company requires an ongoing investment of time, effort and money. Obtaining the right technology and hiring smart talent can certainly help, but even then, tools and people won’t necessarily guarantee the transformation of a data-resistant culture. Defining a clear strategy can lead to meaningful success measures and key performance indicators (KPIs), but it won’t necessarily propel people to regularly rely on such metrics. Offering training to your employees can begin to close the data literacy gap, but it may not compel them to use or apply what they learned.
While all these different factors can contribute to shaping a data-driven culture, one of the most influential factors is executive buy-in and support. Whenever I’ve encountered an organization that has made tangible progress toward fostering a data-driven environment, I can usually trace it back to a committed and involved leadership team. If the desire to be data-driven begins at the top, it frequently cascades down throughout anentire team or company. What a C-level executive cares about is typically important to her direct reports and so on. When you compare it to the other aspects of creating a data-driven culture such as acquiring analytics technology, hiring data people, or training employees, it incurs almost no cost—just a small but crucial investment of your leaders’ time and effort.
When it comes to leading by example, an executive’s responsibility extends beyond just carving out budget and signing off on new analytics tools or hires. Your leadership team must be prepared to immerse themselves in data and exemplify the behaviors that they want to see their organization emulate. A “do as I say, not as I do” approach will undermine your data initiatives. Consciously or unconsciously—by design or by default—executives are always leading by example when it comes to being or not being data-driven.
In Thomas Davenport’s book, Analytics at Work: Smarter Decisions, Better Results, he mentions a consumer goods company that felt it was data-driven based on how much time and effort went into analyzing its marketing programs. However, even though the analysis revealed a lot of the company’s television advertising wasn’t effective, its marketing leaders refused to re-allocate marketing budget to more effective channels because they “either didn’t believe the analysis or weren’t comfortable with the implications.” Short-sighted actions such as these become defining moments for organizations, which either reinforce the importance of data or erode its significance. If you are striving to create a data-driven culture, you can’t afford to send a “data be damned” signal to your people like these marketing executives did.
If your executives are prepared to lead by example with data, there are several ways in which they can demonstrate the importance of data to your organization. In some cases, they can model the desirable behaviors through their own personal actions or demonstrate the importance of data in public settings. Here are six areas where executives can lead by example with data:
Daily usage. One of the most impactful ways of sending a message to your organization that data matters is for executives to actively use the data. While most busy leaders aren’t likely to log into an advanced analytics tool, they could benefit from having a dashboard on their mobile device that they can access while traveling or in meetings. One executive displayed her familiarity with the data by periodically asking probing questions of her team about particular data points. Observing leaders using data on a regular basis will inspire other managers and employees to follow their example.
Decisions. If data is truly important to your organization, all of your leaders’ decisions should be based on data—with no exceptions. When executives request data in order to make key decisions, they reinforce data’s role as an important strategic asset that serves an integral part of the decision-making process. They can also hold their direct reports accountable to use data in their decision making.
Communications. Each email, presentation, or meeting discussion represents an opportunity to share insights on business performance, promote data-driven wins, and emphasize data’s importance to the organization. Messages that highlight key metrics show data is top-of-mind with executives and is something that employees should also embrace.
Meetings. Executives spend between 40-50% of their time in meetings. Many of these meetings can be time-consuming and ineffective. However, if a greater emphasis is placed on reviewing key metrics and developing action plans based on the results, data can then guide the meeting agenda and make meetings more focused, productive and useful for everyone involved.
Training. Where busy executives choose to spend their time can indicate how important something is to them. If an executive carves out time to participate in data skills training, it sends a powerful message to his team that these skills will be critical to his team’s success.
Digital displays. When an executive chooses to display key metrics in prominent public locations via digital displays, she sends a message to employees that the metrics and targets are collectively owned by her team. A telecommunications company actually took it one step further and added touchscreen displays so that its senior managers could interact with the data and discuss it in ad-hoc meetings.
If you’re not a business owner or senior executive, that doesn’t mean you can’t also lead by example from your position in the organization. It can be an opportunity to differentiate yourself and help drive the data-driven change your executive team wants to see. At a technology firm, three managers were asked by a newly-appointed, data-savvy leader to share data insights from their respective areas of the business. Two of the managers panicked because their previous leader had never made such a request; however, the third manager was prepared because he already ran his team based on data. In their subsequent presentations, his data-driven focus contrasted sharply with those of his two peers, and this manager has seen his span of influence grow rapidly under this new executive. Who your executives choose to reward and promote can also send the right or wrong message about whether being data-driven matters to your organization.
If culture can be defined as “the way we do things here,” how much of the way your company does things involves data today? If you see some gaps, you might want to evaluate the mindset and actions of your executive team. Executives must be prepared to live and breathe the data—showing repeated examples of how and why data must be embraced within their organizations. If your leaders can provide these positive data-driven examples, they will have a far more influential effect on cultural change than they may realize.
In 2009, former Google executive Marissa Mayer led a project to test 41 different shades of blue for its Google advertising links. This level of granular testing caused one of Google’s visual design leaders, Douglas Bowman, to leave the company after growing “tired of debating such minuscule design decisions.” However, it was later reported that this minor optimization actually increased Google's ad revenues by $200M that year. More importantly, it gave the search giant a powerful anecdote for why being data-driven is a cornerstone of its culture. With the right attitudes and actions around data, your leaders can generate equally powerful stories that can propel your data-driven culture forward. A little role modeling with data can go a long way.