Being a data-driven organization takes more than great technology and quality data. Like other aspects of digital transformation, it requires the right internal processes and culture — where the business properly guides incentives and takes steps to ensure that data is driving decisions appropriately. Failing to do this can lead to data misuse, which can be costly and hard to identify.
Here are some common symptoms that your organization is merely masquerading as data-driven:
— YOUR EMPLOYEES ARE MAKING DECISIONS BASED ON THE TYRANNY OF AVERAGES: Treating customers, suppliers and other stakeholders as a whole and making decisions based on averages can have harmful consequences. Your organization may be acting on data, but if the aggregate belies the reality underneath, the data is not giving you the full picture. Nuances are lost, which can lead to lost income and damaged relationships.
— EVERYONE HAS THEIR OWN VERSION OF THE TRUTH: When employees argue that “my truth is better than your truth,” it’s a sign you’re just pretending to be data-driven. Each team may be acting on data, but if they have different information, they are bound to disagree and some may even be misled. The cause may be siloed data, where each team looks at their own slice of reality.
— DECISIONS PRECEDE DATA: First, recognize that instinct and experience are still critical in business. The key is not to mislead others by applying numbers to justify a position. This sets a bad precedent when leaders should be setting an example.
— EMPLOYEES HAVE MISGUIDED INCENTIVES: Data is often tied to bonuses and other rewards, but incentives backfire if they’re not applied judiciously. If sales leads know they’ll be rewarded for securing a second call, they’ll take the call even if it’s unlikely to generate a sale. People game the system; it’s human nature. Targets should be used to motivate, not punish, or they will encourage bad behavior.
Data holds tremendous potential to improve customer service, innovation and efficiency, but organizations need the right environment to leverage its potential.
(Sudheesh Nair is CEO of ThoughtSpot.)
