The Five Pillars of a Data-Driven Organization

The following is an extract from Be Data Driven.

A data-driven organization is one that utilizes data to improve its business. Here are five different pillars I discovered over time that make up a successful data-driven organization: strategy, leadership, data literacy, data and technology, and culture.

1. Strategy

Having a data strategy is paramount to success. If the organization does not know where it is going with data and how data will be utilized to help the organization succeed, the overall work with data and analytics can be hindered.

So, what does a data strategy do to help shape an organization to be data driven? Here are just a few examples:

An organizational data strategy is a starting point for an organization to succeed with being data driven. Figure out what exactly you want to do with data at your organization, then build a strategy to achieve that outcome and your organization can be on its way to being data driven.

Leadership must take the time and effort to either have the right leaders in place to drive the strategy or hire them. With the right strategy, organizations can succeed with data. If you do not have a data strategy, and by that, I mean a holistic, company-wide data strategy, get one in place as soon as you can.

2. Leadership

Within a data-driven organization, leadership and its ability to take the organizational data strategy and bring it to light is crucial for an organization’s data-driven success.

Leadership sets the tone for the organization and the organization will follow. If leadership is not using data and insight to make decisions, what incentive does an individual who is not comfortable using data have to use data to make decisions?

It is also true that leadership doesn’t need to know everything when it comes to data, but must ensure they are confident in their data literacy skills to ensure the right strategy, culture, etc. are in place for success.

As leadership, ensure you yourself are strong in your data literacy skills. Second, ensure your leadership team is. Third, ensure your workforce is. Along with these areas of focus, ensure you are set with the right leadership structure around data. Ensure everyone is on board, strong and knowledgeable. Finally, lead your team and the company to truly be data driven. The culture side is something you can influence heavily, so do so and help people want to use the power of data.

3. Data Literacy

Data literacy is a key element throughout any data-driven organization because within data literacy is found the human element. Data literacy is the ability to read, work with, analyze and argue or communicate with data. Not everyone in the world needs to be a data scientist, but all need to be data literate.

The first characteristic of data literacy is the ability to read data. The second characteristic is the ability to work with data. The third characteristic is the ability to analyze data. The final characteristic is the ability to argue and/or communicate with data.

Overall, data literacy is a key pillar and strength for the organization. As part of the five pillars of a data-driven strategy, data literacy helps implement a data strategy with success. Leadership, the second pillar, will be the ones who put a data literacy learning strategy in place. By understanding the make-up of the workforce and the need for upskilling and reskilling, leadership can help ensure data literacy permeates through the organization’s framework and workforce.

As leaders and individuals, drive a data literacy initiative personally with yourself to begin, but then lead it in your team, business unit and/or organization. These things are key to driving success. Data literacy is a wonderful way for an organization to ensure data and analytical success, and to build a truly data-driven organization.

4. Data and Technology

Let’s make one thing very clear upfront: a tool is not a strategy. It is a tool. Data doesn’t just come to an organization ready-made for our use, there are other factors that need to be in place to ensure the data is ready for use and sound.

Within technology, we have tools that allow the democratization of data to the masses. We find the ability to store large quantities of data in the Cloud. We have data scientists and engineers using coding to put in place advanced analyses or models. Technology is not only a key element, but the adaptation of the data and technology to the needs of the organization helps an organization be flexible and adapt to the changing environment around them. With the other characteristics already mentioned, how do the first three pillars interact with this fourth pillar?

As a part of the organization’s data strategy, included should be what tools and technology the company wants to invest in to ensure a successful strategic implementation. Then, when the strategy is in place for what tools and technologies will be purchased and utilized, leaders pull the trigger on budget, investment, training and usage of the tools and technology. Finally, data literacy can then empower the individual users to use the tools correctly and soundly. With the right data literacy skills, the data can come to life through the technology.

Invest in the right data and technology. Let your data strategy help drive this for you. The strategy sets the tone for what you are doing and what you are looking to accomplish. Use that strategy to then dictate the right software and technology for you.

5. Culture

When I am asked what the number one roadblock is to data and analytical success and in this case, we can add in a data-driven organization, unequivocally the answer is the culture of the organization.

The culture of an organization as I define it can be broken down to four legs of a stool: 1) the traditions, or heuristics, at the organization; 2) the skill set of the organization; 3) the beliefs of the organization; and 4) the organization’s personality and/or way of doing things.

For organizations to be truly successful with data and analytics, these four legs need to be strong and steady, ready to use data to drive successful work. If the skills are not strong within the organization, data work can falter. If the beliefs of the organization do not coincide with a belief that data matters, the organization can falter as a data-driven organization. If the personality believes more in gut feel and not in the power of data, the organization can falter.

Overall, one can see how the culture of the organization ebbs, flows and influences the ability to be data driven. Never underestimate the impact of an organization being ready to actually use data. Far too often, I am afraid, organizations get ahead of themselves and buy all the storage capacity, tools, technology, etc. to use data but fail to become data driven because they were not prepared for the cultural impact to take effect.

Ensure your culture is ready to succeed. Look at the pillars that exist within the data-driven culture. What areas need improvement? Are people ready to drive data-driven success? Do you have sound change management principles in place to help this all work? If you can’t answer these questions in a strong and satisfactory way, then it is time to really home in on your culture. Without that knowledge and capability, you might see all your goals and dreams of being data driven fade away.