Unlocking business success with data-driven leadership
It's fair to say that since the pandemic, investment in data and analytics is no longer seen as a ‘nice to have' but critical in maintaining business operations. A recent State of BI - Analytics Survey of over 460 data professionals across Australia and New Zealand Nearly showed almost all (99.5%) are developing new use cases for data to maintain business continuity.
Now data is a strategic asset that, when infused throughout an organisation, becomes an unmatched competitive advantage. Companies that have invested in data technology and education are quickly outpacing those that don't. In fact, the survey showed 47% of data professionals across the ANZ region are using data to improve efficiency, 40% to identify new revenue streams, 29% to optimise supply chains and 29% to reduce expenses.
As a result, today's leading executives are choosing to invest more in business intelligence every year in order to better adapt to the evolving competitive landscape. In fact, the survey showed 67% of respondents said BI and analytics programs are more important or much more important to their daily operations today, and 55% of companies are using data sources, analytics and dashboards more often or much more often than before COVID-19.
On a global level, Gartner further reports that even during a pandemic, most executives accelerated investments in data analytics.
Despite this increase in spending, however, executives report the adoption of analytics is at a standstill, and they have yet to realise the long-term benefits of their investments. According to NewVantage Partners, the biggest hindrance to increasing the adoption of analytics is the inability to build a data-driven culture throughout the organisation. Just a quarter of companies report that they achieved their goals of forging a data culture and creating a data-driven organisation. Why is this?
Senior executives should consider that they are part of the problem—and the solution
According to a survey by Harvard Business Review Analytic Services, almost 75% of organisations don't have a leadership that supports a data-driven culture or nurtures analytics-led innovation. Alarmingly, 24% of respondents say their company culture tends to limit access to information, and 20% think that organisational structure impedes use of analysed data.
In short, company leadership is failing to lead by example. They are not embracing data and analytics, and in turn, their teams are failing to adopt data-led approaches to their work.
The end result is the entire business choosing to neglect intelligence that could provide beneficial strategic insights, opportunities to drive growth, increase revenue, and speed past the competition.
What can executives do to change this?
Understanding and embracing a data-driven culture
For too long, organisations have assumed that being data-driven solely means using technology, often in the form of charts, dashboards or visualisation tools. They invested millions in enrolling employees in analytics classes, data science certificates, and teaching people how to query a database.
As the leaders of their teams, executives must develop a new vision around what it means to be an intelligence-led company. They should advocate for an organisational culture that adopts analytics as more than just a best practice. They must also redefine what it means to be data-driven.
So what does being data-driven mean?
It goes deeper than “bring charts to meetings” or “make decisions with numbers.” It means implementing a hypothesis-driven culture to identify theories, test them, and rigorously seek to disprove them while rapidly implementing those that show promise. People must make decisions based on evidence. Don't let teams search out favourable statistics. Encourage them to look at the complete data picture and come to conclusions based on the preponderance of the evidence.
Making it easy for teams to access data at the right place and time
The key to increasing the adoption of analytics is lowering the barrier to entry, bringing the right insights to the point of decision rather than expecting individuals to seek out new data. Traditionally, organisations asked users to dig through dashboards, submit data requests, or wait for reports to make informed decisions. This was a starting point as many organisations began their quests to become data-driven, but it was also error-prone, distracting, and quite simply, slow.
Organisations must adopt new ways of delivering analytics insights if they want users to test different ideas and make quick decisions based on data at every turn. To do this, organisations have to bring the data to the user within their business tools rather than creating yet another destination for decision-making. Instead of asking workers to leave their CRM, their productivity tools, the apps they use to make decisions and take action, organisations need to bring the data to them, seamlessly embedding it in the tools they are already using.
Today, this is the single most important factor to evaluate in BI solutions. According to the Sisense-commissioned IDC Internal Analytics Survey 2020, 61% of business leaders say incorporating analytics into their existing workflows is one of their biggest objectives while choosing third party solutions.
Embrace the inner analytics ‘evangelist'
Finally, executives must take the lead to drive analytics adoption and become the organisation's chief evangelists. They must make use of a multidisciplinary toolbox of skills—including experiential, creative, and analytical, to gain insights to shape data-driven business strategy. The days of passing off data questions to specialists and analysis are over, and if people are going to ask everyone in the organisation to be data-driven, that change must start from the top.
Take CMOs, for example, who must combine creative thinking with a surge in customer and prospect data to target the correct audience with the right marketing channels. Today's buyers prefer to learn about products on their own, rather than engage with salespeople right from the start. This puts the onus on CMOs to make smart choices about advertising, content, and demand generation, and they must make these decisions in hours and days, not weeks and months.
Another example is sales leaders. Today's CSOs and CROs must do more than set quarterly goals before retreating to the sidelines as cheerleaders. They now have the data to investigate forecasted revenue shortfalls, measure the pace of sales reps, test various sales cycle lengths, and more. Implementing a metric and hypothesis-driven culture ensures the team abandons sales tactics that don't work and rapidly implements the ones that do. In the end, the whole company predictably hits its revenue targets. Everybody wins.
Capturing the competitive edge with data-driven leadership
Executives that choose to lead will see their businesses evolve into modern, agile, data-driven enterprises. They will succeed and thrive, leaving their competition behind.
In a McKinsey survey of C-level execs and senior managers, responders from high-performing organisations were 70% more likely to have a data leader in the C-suite. Their organisations were also more likely to foster a culture of data-driven iteration, rapid testing and failure, and making data accessible to everyone in the company, even frontline employees.
The consensus is clear: To succeed in today's quickly-changing business environment, the entire company must make the shift to becoming more analytical, and it is up to all executives to lead the way. Executives must champion data initiatives, infuse analytics into business workflows so everyone can use actionable intelligence, and they must be examples of a data-driven culture to the rest of the company.