Data – Are You Using It to Best Your Competitors?
By Eric Johnson
Data is only useful when it is used to change behaviors, processes and/or activities.
Data can make or break an organization and often many executives ignore it at their peril. When done incorrectly, a data strategy can be used to misrepresent actual performance, serve as tools in political fights, and reduce the focus to meeting simple numbers instead of strategic initiatives. However when viewed holistically, data can be an immensely productive part of an organization and can even establish a strategic advantage over other market players. But to capture these benefits, the organization must instill the mindset of using data as a key component in problem solving.
Create the causal strategy behind data usage
Why do you want to use data in the first place? Is it because you heard about it in the myriad of online conversations and business ‘ideals?’ Or have you heard of the catchphrase ‘big data’ and are curious about what it means and how it is used? Regardless of the exposure, many organizations want to reap the benefits of data for their organization, but do not understand how data fits within their business model. To start, it is important to isolate those aspects of the business that are considered key to meeting shareholder requirements and customer satisfaction. To highlight a previous post, this is where a process improvement exercise may yield benefits. Once the processes are highlighted, establish what metrics you want out of them. These KPIs highlight what is important. As processes are reviewed, new KPIs can be developed, but it is important to prioritize them in order to best apply scarce resources.
Develop the in-house processes to capture the data you want to use
An important aspect to note is the word ‘processes’ vs. ‘infrastructure’. A common misbelief is that a robust IT department is required to have an effective data analysis program. While IT is important, data analysis can be performed with the ease of spreadsheets and Sharepoint sites. The key word here is ‘standardization’ – developing spreadsheets or other tools that can be used consistently and that yield the correct data/calculations when used. A bonus is to create a system with the least level of complexity to reduce the occurrence of work-arounds that are often developed by front-line users when ‘planned usage’ goes awry. While automation would be ideal, the focus should be on performing the calculations necessary and ensuring that the data to be collected as inputs is true and represents the actual environment in which the work is being performed. For example, in measuring the number of widgets produced from a particular line, if workers feel threatened by not producing a certain amount, they may ‘fudge’ the numbers or perform manipulations that will ultimately give misreadings about the state of the business. Therefore, the in-house processes developed must incorporate the culture of the organization. If it is observed that the culture is not ripe for data analysis, an important pre-step should be to align it more closely to the goals of the organization.
Understand how to go from data to execution
Now that we have our data in hand and understand how it represents the state of our business, it is time to develop the means to adjust our business processes or market approach in order to achieve the metrics we have determined are most favorable to meeting customer expectations. To do this, we will want to first socialize the metrics to create buy-in. Once aligned, then solutions can be developed from our collective organizational knowledge. This includes workplace surveys, workshops, focus groups, etc., The importance here lies in fostering ownership while tapping the rich knowledge of employees that may not be organizationally incentivized to initially provide input. By incorporating employees in future state development, senior management gives a voice to those who earnestly would like to see change for the good, while underlining that change with the actual ability to measure its effects. It is here where data facilitates the conversation between management and employees – it is a neutral way in determining the performance of the organization and how to make it better.
By no means is the incorporation of data an easy task into an organization. You will get push back as the data is interpreted in a myriad of ways to fit a myriad of agendas. However, by establishing those critical-to-quality KPIs, having them reinforced at the highest levels of leadership, and incorporating them into a philosophy of organizational change, a firm can naturalize the use of data into its culture, ultimately bringing the business closer to achieving full customer satisfaction in the most efficient way possible.
At Propulo, we work hand in hand with companies that embrace the power of data when it’s used effectively. In a wide variety of industries and geographies, our team has partnered with innovative and forward-thinking companies to help them amplify their data-usage strategies. If you’d like to understand how our innovative People Meet Process approach can help your team, we’d love to chat.