How to Drive Business Growth through Data Driven Decision Making

Natasha Serafimovska

Career Coach, Professional Resume Writer, Freelance Writer

COVID-19 and the uncertainty that came with it has stress-tested millions of businesses in the past two years. While experience and industry knowledge are important in decision-making, they often fall short in times of crisis when existing rules no longer apply. This has pushed many to look at data driven decision making as a way to reduce risk and achieve business objectives.

Still, despite its benefits, data driven decision making is still an aspirational goal for many business leaders as opposed to an existing practice. While 99% of business executives say they’re actively investing in big data and AI, only 48.5% are driving innovation with data. Additionally, 24% feel like they’ve created a data-driven organization. 

That’s because building a data-driven business requires more than investment in the latest technologies. Instead, businesses who really want to make the most out of their data need to invest in both digital transformation and human capital development to gain true insights and win a competitive edge. 

Here we’re looking at what is data driven decision making and what are some ways businesses can encourage employees to become more data driven in their organization.

What is Data Driven Decision Making (DDDM)?

Businesses generate massive amounts of data every day. Every email, every transaction, task and meeting is a data point that can be used to discover patterns and anomalies in your business. These can drive or hinder your growth. 

Data driven decision making simply refers to the tracking and analysis of this data in a way that allows you to make informed decisions. These decisions should be closely aligned with your strategic goals as a business.

Some questions data can help you answer:

  • Why people buy or don’t buy from you;
  • How to change your products or services to increase market share;
  • Why your customers are sticking around or leaving;
  • Where your teams spend the most time and how to improve productivity;
  • What changes you need to make in order to get your business/teams perform better;

As you can see, data can help you improve virtually any area of your business, provided you’re working with accurate and up-to-date dataset. 

How to Be More Data Driven?

Data-based decision making can give you an edge when it comes to deciding what new features to add to your product or which new market to tackle next. It’s a powerful way to fuel business growth and diminish uncertainty. 

Here are four key steps you can take towards building a data driven corporate culture.

Identify Your Key Business Objectives

Building a data driven business can be an overwhelming task, especially if you’re starting from scratch. It’s important that you start small. Look at areas where you can see the most benefit and start building from there. 

As a first step, look at the key business objectives you want to achieve.

  • Are there any objectives in particular you are struggling with?
  • Is your sales team underperforming?
  • Is your marketing not yielding the results you were anticipating?

Identify two or three areas in the business that you’d like to improve and focus on those first.

Second, assess the current situation and how you got there. Is your existing decision-making process based on poor quality data or do you rely more on your gut instinct? Are there too many people involved in the decision-making process, bringing added subjectivity and noise to the table? Being aware of your shortcomings at this point will help you avoid making the same mistakes in the future.

Look at Your Existing Data

You can invest in the latest enterprise software on predictive analytics. However, you waste money if your team isn’t equipped with the skills to translate that analysis into meaningful insights.

Before investing in any new training or software, speak to the respective teams. You should aim to understand how they collect and use data on a daily basis. Conduct surveys or interviews to see if there are any inconsistencies in their processes. Some of your teams may not even be using data at all. Then make note of: What tools or personal systems are they using? How are they analyzing that data and applying it to their work?

This exercise should uncover inefficiencies or missed opportunities you can improve on. Perhaps different team members track their activities differently and this skews their metrics? Or your existing data is incomplete and error-prone? Some employees may struggle to interpret the analytics they get. As a result, you could have mountains of data sitting unused.

Invest in the Right Tools

Bad data is worse than no data. When you have no data, at least you know to be more cautious about the decisions you make. Bad data can give you a false sense of security that you’re making the right decision when, in fact, you’re shooting yourself in the foot.

In this context, accurate data collection and storage is paramount. Imagine having a list of 10,000 contacts whose birth dates are stored in a U.S. and European date format interchangeably. Is that important client of yours born on May 3rd or March 5th? 

That’s perhaps an oversimplified example of the damage bad data can do to your business. It also goes to show the benefits good data can bring to your business. In order to ensure quality data across the board:

Reduce manual data entry

This can lead to errors, incomplete entries and out-of-date data points. You don’t have to invest in expensive software to achieve this either. For example, you can use SQL to automatically import data in Excel.

Invest in data analytics tools

You should aim to invest in data analytics tools for every area of your business. This might require some upfront investment. Even so, the insights you’d gain from this will help you reduce costs and increase revenue over time. For instance, if you want to improve the performance of your sales team, you can look at introducing a commission tracking software. This tracks all sales and transactions of your team, automatically calculates their commission and offers predictions on future sales based on past behavior.

Integrate tools

Lastly, you should integrate tools wherever possible to discover patterns and remove data duplication. Rather than having one system for sales and another one for marketing, try to find one tool that can help you do both. Likewise, instead of having tools work in silo, use existing or custom API integrations to enable easy data sharing. One example can be integrating your customer relationship management (CRM) system with your learning management system (LMS). You could also link your project management system with your software development tool to better track your product development.

Train Your Staff

Your data is no good if your people can’t act upon it. Data analysis is a whole field in itself which requires a specific set of skills in order to make a difference for your business. 

While not every employee is going to be an expert data analyst, it’s important that they know how to interpret the data they see. Here, they need to understand two main things:

  1. How to use the software at hand

There are no two tools alike, even if they belong to the same business category. If you introduce a new piece of software, make sure your staff is given proper training and assessment on its use. New tools often fail to deliver the desired results simply because employees struggle with adoption. In fact, 60% of employees find new software frustrating and wish they can fall back on their old systems. 

2. Basic data analysis skills

Regardless of their role, all employees can benefit from basic data analysis skills. Things like data visualization, structured query language (SQL) and regression analysis are powerful skills that can allow employees to dig deep into the data and gain insights. Depending on your budget, you can invest in professional certifications offered by IBM, Microsoft or CompTIA or you can encourage your employees to make use of the myriad of free courses available at Google Digital Garage, Coursera, edX or some of the top universities in the world.

Let the Data Have the Final Say

Regardless of the size of your business, big data and AI are critical for helping your business reduce costs and increase revenue in an increasingly competitive market. Data-driven decision making can also help you build a cohesive corporate culture where teams are confident about the decisions they make.

In order to start building a data-driven culture, invest in technologies and skills that will empower your staff to collect quality data and think critically about how it applies to the business. 

Food for Thought

As data is becoming a major factor in the success of large and small businesses, many will look for opportunities to hire people who have data training or data knowledge. Conversely, it may encourage people to transition into a career field that specializes in data, data research, or data analysis.

If you are already a manager of a company and have experience and knowledge in data, it may be a great opportunity to get into a data management position. Not only do these careers pay well, but the job outlook is also projected keep growing from 2020-2030. Here are some of the fastest growing and highest paying careers.

1 Comment

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