What is a data-driven culture? (And how to start right now)

What is a data-driven culture? (And how to start right now)

We often hear in various forums and on social networks that "data is the 21st century oil". Indeed, although in essence they are commodities from very different fields, they in essence share the same type of processes. Data, like oil, needs to be extracted (by capturing data from different sources), and then, the data needs to undergo a process of refining, that is: being selected, standardized and optimized to subsequently provide value to the company in the form of useful knowledge.

The most important aspect for an organization to have the capacity to work with data harmoniously, is that it first develops a culture based on data (data-driven culture). In this article, we propose to take a tour so that you understand the basic concepts, their implications for your organization, the benefits you can obtain after adopting this philosophy, and finally a series of recommendations to overcome the main challenges that arise when carrying out this great transformation.

What is a data-based business culture?

In this business culture, the differential element is that the company's decision-making is mainly driven by data: facts in the form of numbers, variables, statistical analysis, which empower the organization to make informed decisions and be more objective when conducting analyses and evaluations on any area of the company.

A data-based culture could be defined as a business environment where information is collected and processed consistently and sustainably over time. With the main objective that any member has access to this infrastructure to improve decision-making in their area of operation within the hierarchy of the organization.

The second characteristic is that data is not only made available to the executive hierarchy or a certain group of select analysts, but the entire organization is part of the access, management and sharing of data; this way, decisions are made at all levels, generating synergies between all departments, as each of them needs data from other areas to make decisions that add value to the company as a whole.

For example, the sales team may need to know which products have the most stock in the inventory to develop discount campaigns that minimize the overhead that is being generated. Or, HR department will need to conduct various surveys to assess the level of satisfaction and commitment of their employees towards the objectives set for this year.

The possibilities are truly infinite, as having shared access throughout the organization allows for continuous improvement initiatives to be developed within it, that is to say, we can affirm that a series of capabilities have been developed that allow for continuous improvement cycle to perpetuate over time, which is the culmination within a Digital Transformation plan.

The 7 pillars that underpin data culture

A data-based culture cannot be built overnight, it is rather a gradual process over time, where the organization must develop new capabilities based on new principles that we develop below:

  • Data leadership: There must be a clear commitment and determination to decide why this initiative is to be developed and to involve the entire organization.
  • Data strategy: A clear roadmap should be developed on the different gradual stages, what resources will be needed as well as the benefits expected to be obtained.
  • Data democratization: Access to data should be a shared good in pursuit of a better work environment, promoting synergies and collaboration among all involved areas.
  • Data literacy: Each person must be able to access and interpret the data available to them. Therefore, investments must be made in training programs until the workforce feels comfortable with the new information systems.
  • Data Trust: This refers to people trusting the data, because protocols have been developed to improve their integrity and quality, being updated and valued over time.
  • Data integration: Lastly and not least importantly, data should not be segregated throughout the organization (this is known as information silos), but there should be a centralized repository.
  • Data governance: This aspect refers to how data access policies are developed (based on roles and permissions).privacy, security and also ethical considerations regarding its use.
What advantages can we expect to obtain?

There may be many and varied, although some we have mentioned previously, apart from promoting collaboration and participation within the company, it can be used in a planned way to develop competitive advantages. Using the correct data and analysis tools, you can detect trends and patterns within your industry that will give you a position to make better decisions.

On the other hand, the data can also show us what problems or anomalies we are suffering (and perhaps without even realizing it), especially when we talk about large organizations. For example, reviewing why production orders are going down and being able to detect what changes are occurring in market demands, opens up a new perspective for you to take action and reorient your strategy under this new economic scenario.

Tips to start now

Let's look at our list of recommendations so that you can begin developing your new data-based corporate culture as soon as possible:

1. The culture change starts from the top

The executive leadership is the one that has to start the change in vision and direction required in a project of this magnitude. First of all, understanding how the company will generate business through data and later, must understand all the implications it will have on operations and available resources at this time.

It will be essential to communicate this vision correctly to the rest of the workforce, making them see that they will be the main beneficiaries of this change (avoiding possible frictions and rejections), where the goal should be that the drive for productivity and better decision making will result in better performance and satisfaction for each individual.

2. Be clear about the goals you intend to achieve

Identify in the first place what challenges you are facing right now. The best way to develop a digital initiative is to identify a business case that has a well- defined return on investment and can be executed within a reasonable time frame, always keeping in mind the constraints due to the resources that will need to be provisioned in infrastructure and resources for the correct development of the project.

Some common problems are lack of budget, lack of executive involvement, resistance to change or lack of technical knowledge. If these factors are not considered, it can pose a serious risk to the successful performance of the initiative.

3. Understand and communicate the value that data will bring

Investment in training is needed for all individuals to acquire a good level of data literacy. As we have mentioned, this concept refers to the good performance of people with data. If there are people who are not comfortable working with data, they will look for alternative ways of doing the job or block initiatives. This is actually one of the most sensitive and complicated points of the project, as there may be sensitive issues related to data privacy.

Imagine that from now on, the hours of entry and exit of all employees in a production line are publicly recorded. This information not used correctly or for purposes that are not ethical, for example to strictly control who enters at their time, without considering other variables, can cause the workforce to feel unprotected and at a disadvantage which may cause a counterproductive feeling of resistance to change.

We must always take ethics into account in setting the goals to be pursued with technical systems.

4. Invest in a good data infrastructure

This is another key point, without good data infrastructure, it will be very difficult to transform this data into quality information. It is necessary to opt for systems that allow the collection, processing and adequate storage for the volume that the organization needs.

In collaboration with the IT department, it will be key to decide whether to opt for a cloud model such as Amazon RedShift or Snowflake or, on the contrary, to opt for a completely in-house infrastructure to avoid exposing data in public infrastructures due to privacy and security issues. Choosing the right strategy in this regard will be vital to provide value to the business and also not to put the company at unnecessary risk that could affect legal or sensitive issues.

5. Remember, the most important thing is people

Developing a data-based culture is more than a simple leap.Technological; it is about a true organizational transformation allowing to develop an operational intelligence that allows the business to navigate the complicated and changing current business landscape. And the key to it is: People.

They are the ones who will ultimately extract value from the data, just like any technological tool they are simply mere utensils that must be put into people's hands. They will be the protagonists of the change, generating a virtuous circle of success and prosperity throughout the organization.

A final reflection

Adopting a data-based culture is more than a trend; it is a strategic necessity in the digital age. Organizations that commit to understanding and using data effectively are better equipped to respond to market changes, innovate, and consistently deliver value to their customers.

If you're ready to take your organization to the next level, don't wait any longer to integrate a data-based culture into the epicenter of your business strategy. Contact Ettnia today to find out how we can help you start this transformative journey so you can start to take advantage of the data.

Together we can uncover new opportunities and foster sustainable growth in your business! Contact us now..