The Strategist

How to become a truly data-driven company

10/25/2017 - 15:38

Sometimes the answer lies in the question itself. This truth is simple, but often we forget about it because of a heap of data that falls on us every day.

The main thing in analytics is to be able to ask the right questions. Imagine, a report shows what happened: your website saw the maximum number of visitors - 63,000 people - on Thursday at 10:03. The paper gives specific figures.

Think about what questions you can ask. What happened? How and why did this happen? Let’s see. The analysis shows why this happened: TV show 60 Minutes mentioned your company at 10:01, and recommended what the company should do to stay at about the same level.

Just understanding the reasons for what happened, you can formulate an action plan or recommendations.

Big Boss Problem

The main thing to remember is that if data is ignored, and the big boss does what he wants, then collecting this data does not make sense. To become data-driven, you need to build a special culture in the company. Fortunately, it can be developed not only from the top to the down - from the leadership to the field - but also from the bottom up.

And the impact and benefits can be very noticeable. One of the reports contains striking facts: a return to each $ 1 invested in the analysis is $ 13.01.

Data-driven management pays off.

Provide a choice

If possible, provide users with intuitive, appropriate tools to control how their data is used or who can see the information. For example, it may be possible to control type or frequency of marketing mailings, or an option to refuse forced notifications from applications and offers from partner organizations.

Netflix offers an interesting feature in the user settings panel. The user can refuse to participate in A/B testing.

Despite this possibility, a small number of subscribers actually used this feature, but, at the same time, they felt the service cares. In this situation, Netflix earned a good reputation and lost almost nothing
Inability to work with data

Many companies sincerely believe that they have a decision-making process based on data, yet, intuition still rules the ball. In 2014, the Economist magazine interviewed 1,135 senior executives about factors that influence decision making. Intuition and personal experience ranked first in this ranking.

Why is this happening? Without digging too much into, we can mark out three factors: the data itself, the corporate culture of the company and, finally, the human brain.

Instead of relying on the sixth sense, develop in your company a corporate culture in which ideas are questioned until reliable information is obtained, such as the results of A/B tests or proof of concept.

Many companies believe that if you generate a lot of reports, then you can refer yourself to the category of companies with data-driven management. Although such reports are part of what the company does, often they only represent past or present facts without providing sufficient context, without explaining the cause-effect relationships, and without any particular recommendations what steps to take. Yet, this situation can always be changed.

Based on 'Creating a Data-Driven Organization' by Carl Anderson