How building a data-driven decision-making framework into your company, from the top down, ensures longevity and profitability.
The Art of Making Smarter Decisions
The common phrase is ‘work smarter, not harder.’ So how do you make decisions that allow you to work smarter?
Currently, much of our decision-making is intellectual. It’s based on logic, gut feelings, and personal impressions. Sure, some of it is based on experience, but these decisions are not always made based on tested, quantified data.
Why? Because the data isn’t there, or if it is, it’s incomplete or difficult to find, or we’re not quite sure what data we should use to help guide us. An impulse decision is fast and easy, so it wins out — but in the long run, it’s probably not a good choice.
This is not to discount business models and prediction tools, when they are used with reliable data. But companies don’t always have access to that data, and when they do, it may not be complete or trustworthy. Acting on results from a business model run with less than stellar data can be just as bad as an impulse-driven decision.
Data-driven decision-making is smarter. It’s the decision-making of the future, built to drive insights that drive business improvements and success. Data gives your company a solid basis on which you can make your decisions and take action.
Deciding What Data to Use
In the world of Big Data and the Internet of Things, it’s hard to find something you don’t know or can’t find out. Data exists on pretty much everything and anything relating to your business, so how do you know where to start?
Working backward can be helpful. Instead of analyzing what data you have available and trying to select the best metric, look at what your business is trying to accomplish. Determine the questions you must ask to achieve those goals, and that should tell you what data must be collected and analyzed.
You can determine what data sources are ideal by investigating what sources you may already have that provide worthwhile and trustworthy information. If you don’t have a source for good data, your business will have to implement data collection that suits your needs, and meets privacy and security requirements and regulations.
Deciding what data to use is easier when your company has a data-driven culture. Whatever conversations or planning you are having within your company, put data at the center of it all. Define your key performance indicators and reflect on them regularly.
You can also center data within corporate culture by ensuring information is made available quickly and in an easy-to-find manner. If you put up roadblocks to staff accessing data, they won’t do the extra work to find it. Implementing practices for improved data collection and governance is key.
Beware of The "HIPPO"
There’s a danger lurking in every business or organization, and that’s the HiPPO, otherwise known as the "Highest Paid Person’s Opinion."
Experience matters, of course, but not when it comes to data-driven decisions. When you’re relying on the HiPPO, you are missing out on the current data and information that makes your business smart.
Building a data-driven decision-making framework into your company, from the top down, ensures that all decisions are made based on facts and figures rather than emotion and feelings, no matter what level of experience a person has.
Hiring outside experts who can provide nuanced opinions, free of situational bias, is one great way to make smarter decisions. An outside source won’t fall prey to HiPPOs, nor be one themselves.
Implementing Smart Decisions
Getting the right data and using it to make decisions that are HiPPO-free is just the start. The real action comes in the form of implementing those decisions that you have made. Collecting, analyzing, and using data to make decisions is just the start. When you transform your company with the decisions you have made, you can see the impact of data and all that it has to offer.
TechTarget says that, according to an MIT Center for Digital Business study, “organizations driven most by data-based decision-making had four percent higher productivity rates and six percent higher profits.”
This shows that when your company uses a data-driven decision-making model, you truly will be working smart, not harder. With higher productivity rates, and higher profits, it is clear that having a strong grasp on data collection, governance, and analytics is important.
In today’s experience economy, customers are looking for a complete and holistic combination of goods and services, tailored to each individual client and his or her needs. By using data to understand what makes people tick, your company can create experiences and memories that last.
CloudSkope employs a team of strategic leaders, security experts, and cloud experts who are ready and willing to help your organization audit its data practices, and start your journey towards true digital transformation for the modern age.
We have years of experience in digital strategy, offering our guidance and advisory services to get you stop thinking about transformation and start doing.
Get in touch with us today to learn more about our Digital Transformation Services for your business.